Good news. The Central Bank reported this Friday that the Monthly Indicator of Economic Activity (Imacec) grew 6.4% in May, compared to the same month of the previous year, an increase that was than expected by the market but which confirms a decelerating trajectory.
“The increase in Imacec was explained by service activities. Meanwhile, the production of goods grew, influenced by the manufacturing industry and the rest of goods,” the Central Bank said in a statement.
The seasonally adjusted series fell 0.1% compared to the previous month and increased 5.8% in twelve months. The month registered two business days more than May 2021. The decrease in the seasonally adjusted indicator was due to the performance of most of its components, “an effect partially offset by the increase in mining,” detailed the issuing entity.
In the market they had anticipated an expansion in May in the range of between 3.9% and 6% compared to the same month in 2021, while in the Bloomberg survey the average number of responses pointed to 5%.
But Despite being above market estimates, the May figure shows the adjustment that the national economy is experiencing, since in April the monthly indicator had expanded by 6.9%according to the records of the governing body.
“In our opinion, the figures for May reflect the moderation that economic activity is having, and the one that would continue in the coming months. This, because the stimuli are being significantly less. The MPR is in a clearly restrictive zone, the fiscal impulse is considerably lower, the terms of trade and external financial conditions are deteriorating, and global growth is moderating,” César Guzmán, manager of Macroeconomics at Inversiones Security, said in a report.
“All of the above leads us to ratify the projection of a GDP increase of 1.5% for the year as a whole,” added Guzmánwhich had anticipated an expansion of 5% for the Imacec in May.
Services pull the cart
In May, services grew by 11.9%, as a result of the performance of personal services, particularly education. Transport and business services also contributed to the result.
But, when looking at the figures adjusted for seasonality, service activities showed a contraction of 0.1% compared to the previous month, the Central detailed in its statement.
For its part, the production of goods grew by 1.6% in the fifth month of the year, an increase that is explained by the performance of industry and the rest of goods, with increases of 2.7% and 1.5% , respectively. In contrast, and as yesterday’s figures for the sector had anticipated, mining fell again, this time by 0.1%.
In the seasonally adjusted analysis, the production of goods grew by 2.2% compared to last April, a result mainly determined by mining, followed by the rest of goods. In this case, the fall came from the industry, which showed a decrease.
And, as expected, trade began to show a stronger adjustment from the high rates that had characterized it in previous months. The sector registered a decrease of 0.1%, as a result of the drop in retail sales, particularly supermarkets and department stores. The outlook for wholesale and automotive sales was different, as they increased in May.
“Most of this growth (of Imacec in May) is explained by the service sector, which grew 11.9%. However, we see that it is slowly decelerating. If we go into detail, we see that there is still some pent-up demand that built up during the sanitary restrictions,” he said in a comment. Priscila Robledo, Chief Economist at Fintual.
“Commerce, meanwhile, remains weak and went into negative territory in annual terms. The Central Bank probably sees this as good news, because it seems to him that there is an imbalance in private consumption that prevents inflation from falling. It is expected that the activity will continue its deceleration in the rest of the year,” added Robledo.
The fall shown by the seasonally adjusted figures is deeper, 2.3% compared to the previous month, a result explained mainly by the performance of retail trade, the issuing institute limited.