Fynsa
In general, when an important economic figure comes out, we see analyses, evaluations and interpretations of the number/variation, on which there are rarely opposing positions. Yes, perhaps we can see different considerations, more or less optimistic/pessimistic readings, flats, but dissent is infrequent.
This is why the publication of the Imacec for March generated so much interest in me, since the 2.1% drop in relation to March 2022 had interpretations for all tastes: some press articles declaring technical recessions, while the Treasury drew positive conclusions. Thus, I believe that putting the objective data on the table will allow us to have our own interpretation, which, as usual, will probably be somewhere in the middle.
The former has already been mentioned. Activity showed a decline of 2.1% in its year-on-year comparison, a stronger drop than what the market expected (-1.7% YoY) and what we expected (-1.4% YoY). I mention this, since the type of surprise to the market is an important indicator regarding the data, especially when these expectations already consider other figures of the month, the analysis of the news of the period, etc. The decline was mainly due to the fall in mining (accounting for almost 50%) and trade (another 25%), which was partially offset by services.
Second, it is always interesting to see what is happening with activity at the margin, i.e., compared to the immediately preceding period. For this, economists use a statistical tool called "deseasonalization", which allows us, as the name implies, to remove seasonal effects that muddy the comparison.which allows us, as the name implies, to remove seasonal effects that muddy the comparison.
In this case, the series showed a drop of 0.1% versus February, which was also mainly explained by the decrease in mining, followed by commerce and industry.. This, like the year-on-year variation, was offset by services. The seasonally adjusted series allows us to obtain another interesting indicator, which is the speed of growth.
This way of measuring activity is traditionally used in the United States when reporting GDP data, in its annualized version. If we calculate this same metric for Chile, the growth rate reached 3.9% annualized t/t, which in any case is highly influenced by the January figure, a situation that will cease to be true as of next month, so this indicator would start to decline.
In our view, the minister's positive interpretation is based on this measurement. Another interesting conclusion is that, given the 3.9% annualized t/t increase, the country would not be in a technical recession.
Finally, and considering the volatility of mining, the non-mining Imacec is evaluated to measure the underlying economic dynamism. This decreased 1.0% YoY, although in seasonally adjusted terms it increased 0.2% m/m, completing three months of increases.. With this, the growth rate of the non-mining component reached a non-negligible 6.4% YoY (while the same for the mining component reached -10.5% YoY).
What do you think? Who is right?
