Activity plummeted in December, amid a sharp depreciation of the currency. According to the EMAE (official monthly GDP proxy), activity showed a sequential decline of 3.1% MoM/SA in December (vs. a drop of 1.6% in November), leading to a contraction of 1.8% qoq/SA in 4Q23 (down from 2.0% qoq/sa in 3Q23). On a year-over-year basis, activity declined by 4.5% in December (worse than the Bloomberg market estimate of a drop of 3.2%) and fell by 1.5% in the quarter ended in that month.
Mixed 4Q23 results across sectors. Manufacturing fell by 6.2% yoy in the period (vs. a drop of 3.8% yoy in 3Q23), likely affected by several import controls. Primary activities rose by 6.2% yoy in the period (vs. a drop of 2.2% yoy in 3Q23), leaving behind the significant effects of the drought. Construction expanded by 1.1% yoy (vs. 5.5% previously) and services registered a gain of 1.1% yoy in the period (vs. 2.2% in 3Q23).
We maintain our GDP growth forecast of -2.5% for 2024, affected by the expected drop in real wages and the sharp fiscal consolidation plan, but partially offset by the normalization of the agriculture sector after the severe drought in 2023.
Andrés Pérez M.
Diego Ciongo