Fynsa
A new cycle of local data releases has begun, starting with sectoral and employment figures from the INE, which were supplemented by the Imacec for the same month. In this case, the Central Bank published the Imacec for May 2022, which rose 6.4% compared to the same period last year—a figure that exceeded both our estimate and that of the market (5.0% y/y). Despite this positive surprise and the fact that the figure still appears relatively high, the seasonally adjusted series—a statistical method that allows us to compare data from one month to the next—once again showed a decline, this time of 0.1% m/m, although for comparative reasons, the annualized growth rate moved into positive territory, from -0.7% q/q to 3.0% q/q. Remember that some time ago we warned that a technical recession might occur during the second quarter? Well, this data—which was less bad than expected—could “save” the economy from meeting the criteria for a technical recession, once again highlighting the statistical nature of the term and setting aside other, more economic considerations.
As indicated by the INE's sectoral figures, although the Imacec for the mining sector fell by 0.1% year-over-year, it showed significant growth of 5.1% month-over-month on a seasonally adjusted basis, which once again reflects the volatility of the monthly figures for this sector. On the other hand—and perhaps more concerning—the non-mining component showed a 7.4% year-over-year increase but continues to follow the expected slowdown, falling 0.9% seasonally adjusted month-over-month, the largest decline since April of last year. This was attributed to declines in profit margins in the Trade, Services, and Manufacturing sectors.
While the “least bad” data would avert a technical recession (subject, of course, to possible revisions when the National Accounts are released on August 18), this does not mean there are reasons to be optimistic. The slowdown in the most important sectors had not been as noticeable on a year-over-year basis due to the still-moderate comparison bases, but this will no longer be the case in the coming months. Thus, for June, we estimate that the economy grew between 3% and 3.5% year-over-year, and going forward, it is highly likely that we will see growth rates below this level, including year-over-year declines starting in August. In fact, although subject to enormous uncertainty due to the international economic and local political scenarios, we project that the next Imacec figures should show year-over-year variations in the range of -2% to 2%.
Finally, we maintain our year-end estimate at between 1.5% and 2.0%, acknowledging an upward bias in the projection.
