Activity increased slightly in August from the previous month, consolidating two consecutive months of seasonally adjusted sequential growth. According to the EMAE (official monthly GDP proxy), economic activity increased modestly by 0.2% MoM/SA in August, following a 2.1% MoM/SA increase in July. Thus, the two consecutive increases in seasonally adjusted terms led to a +1% QoQ/SA in the quarter ended in August, not having taken place since October 2023 (+1.9% QoQ/SA). On an annual basis, activity fell by 3.8% in August (Bloomberg median of -5.3%) and contracted by 2.9% in the quarter ended in August (-1.7% yoy in 2Q24).
Five sectors increased in the quarter ended in August. On the positive side, primary activities rose by 24% yoy in the quarter in August (vs.+54.1% yoy in 2Q24), reflecting the normalization of agriculture after last year's severe drought. In addition to the sectors that make up the primary sector, electricity and education were other sectors that posted year-over-year increases in the quarter ended in August. Construction fell by 18.4% yoy in the period (from -22.2% yoy in 2Q24), affected by the freezing of public works, while manufacturing contracted by 11.1% yoy in the same period (vs. a drop of 17.4% yoy in 2Q24). Services (including the commerce sector) fell by 4.1% yoy in the period (vs. -4.9% in 2Q24), likely affected by the decline in real wages.
Our take: The second consecutive improvement in economic activity in August is consistent with our view of a sequential recovery starting in 3Q24. All eyes will be on the sustainability of sequential growth in the coming months. Our 2024 GDP growth forecast to -4.0%.