Fynsa
This week, the Central Bank reported that the Imacec for March rose 7.2% year-over-year, exceeding both our estimates (5.5% year-over-year) and market expectations, reversing the downward trend we had observed in previous months. It’s worth noting that, up until this figure, the economy had been showing clear signs of a slowdown, which had intensified in February.
Given this monthly change, and pending confirmation when the first-quarter National Accounts are released, economic activity would have grown 7.9% year-over-year during the first three months of 2022, slightly above our projection and that of the Central Bank, as noted in the statement following the Monetary Policy Meeting. In any case, despite the positive figure on the margin (+1.6% m/m) , the growth rate remained in negative territory (-1.6% q/q annualized), which would fulfill the first condition for a technical recession in Q2 2022. It is important to remember that this concept, as its name suggests, is merely a statistical condition that, to be met, requires two consecutive quarters of decline compared to the immediately preceding quarter. It does not necessarily correspond to the more commonly understood concept of a “recession,” which involves year-over-year declines in GDP, rising unemployment, falling prices, etc.
In disaggregated terms, the mining component of the Imacec fell 2.4% year-over-year, contributing a negative 0.31 percentage points to the overall indicator—lower than in previous months. This was due to a 6.6% month-over-month increase in the seasonally adjusted margin compared to February.
Meanwhile, the non-mining sector grew 8.8% year-over-year, contributing 7.48 percentage points to the aggregate IMACEC. What was truly remarkable was that all sectors showed increases in their margins, which is a significant shift from what we saw in previous months. While this does not necessarily signal a trend, it at least provides some relief from the sharp slowdown that had been occurring in local economic activity. We highlight the strong performance of Services (0.7% m/m, contributing 0.35 pp) and Industry (3.5% m/m, contributing 0.29 pp). It is possible that, to a lesser extent, we are also seeing a stabilization in the retail sector, following significant declines in recent months.
In any case, we do not believe that this positive surprise will continue to occur, especially given the changes in the external environment, coupled with the domestic slowdown itself. It would be more like a brief summer lull. With that in mind, we forecast a 7.5% year-over-year increase for the Imacec in April and maintain our growth projection for 2022 at 1.7%.
