Fynsa
A new cycle of local data releases begins, which started with the sectorial and employment figures from INE, complemented with the Imacec for the same month. In this case, the Central Bank published the Imacec for May 2022, which increased 6.4% with respect to the same period of last yearwhich was above our and the market's estimate (5.0% YoY). Despite this positive surprise and still appearing to be a relatively high figure, the seasonally adjusted series - a statistical method used to make data comparable from one month to another - again showed a drop, this time by 0.1% m/m, although for comparative purposes the annualized growth rate moved into positive territory, from -0.7% y/y to 3.0% y/y. Remember that some time ago we raised the alert that it was possible to see a technical recession during the second quarter? Well, this less bad than estimated data could "save" the economy from meeting the requirements to characterize a technical recession, revealing once again the statistical nature of a technical recession.This is again revealing the statistical nature of the term, leaving out other more economic considerations.
As INE's sectoral figures anticipated, although the Mining Imacec decreased 0.1% year-on-year, it showed a significant seasonally adjusted growth of 5.1% m/m at the margin, again reflecting the volatility of monthly figures for this sector. again reflects the volatility of the monthly figures for this sector.. On the other hand, and probably more worrying, the Non-Mining component showed an increase of 7.4% YoY, but continues with the expected deceleration, falling 0.9% m/m seasonally adjusted, the most important drop since April last year.. This was explained by reductions in the margin of the Trade, Services and Industry sectors.
While the "less bad" data would avoid technical recession (of course, subject to possible corrections when the National Accounts are published on August 18), this does not mean that there is reason to be optimistic. The slowdown in the most relevant sectors had not been so noticeable in year-on-year terms thanks to the still moderate bases of comparison, which will cease to be true over the coming months. Thus, for June, we estimate that the economy would have grown between 3% and 3.5% YoY and, going forward, with a very high probability we will see advances below this, even with year-on-year declines since August. In fact, although subject to the enormous uncertainty due to the international economic and local political scenario, we project that the following Imacec should show variations in the range of -2% / 2% YoY.
Finally, we maintain our year-end estimate between 1.5% and 2.0%, recognizing an upward bias in the projection.
