The government admits that retail consumption declines and activity slows

In its assault on former minister Matías Kulfas, La Cámpora spared no ammunition. The letter from the former Enarsa to disqualify the official contained data in which it is acknowledged that, despite the optimistic numbers released by Minister Martín Guzmán, the economy is slowing down.

In the text La Cámpora / Energía Argentina SA, a key actor of the government even if they try to break away from the poor results, speaks directly to Kulfas. “His management said goodbye with an average 3.4% drop in household retail consumption in Mayyou should know that this average is made up of the retail consumption of households with different purchasing power and in those with lower purchasing power their consumption falls above 5% “punctuate the text.

The drop in consumption referred to in the text is the drop in sales reflected by CAME in its latest survey. There it shows the entity that measures the situation of retail firms a 3.4% decline in retail sales of May compared to the same month of 2021 and 8.9% in the measurement compared to April.

While the government hopes economic activity will remain at levels that have accumulated this year – a 6% year-on-year increase for the first quarter – private analysts have pointed out that a cooling is approaching.

“We expect a decline in activity for May,” said Santiago Manoukian, economist at Ecolatina. “We are starting to see clearer signs of the impact of accelerating inflation e the increase in the cost of credit compared to consumption levelsalthough with internal heterogeneity “.

Manoukian detailed, in tune with La Cámpora’s text, that inflation “hit families in the lower deciles the most, with food exceeding the average, lack of equality in many cases and more dependent on informal work. or autonomous, leading them to cut essential consumption “.

Not all data is negative. The explosion of ticket sales for all 10 Coldplay shows and the escalation in the use of dollar card spending reveals that there is a segment that burns pesos and is eager to spend them.

“The top deciles, least affected by accelerating inflation, are those that require relatively more services and basic necessities, giving the perception of greater overall demand,” Manoukian said.

The slowdown will begin to affect other segments of the macroeconomy. “In the quarter, agricultural activity will play against it, due to the decrease in harvest volumes (5% in soybeans and 6% in corn),” said the economist.

So also Sebastián Menescaldi, director of EcoGo, understands it. “Lor what you see is it starts to slow growth. It is already negatively affecting the harvest and there is no noticeable progress in some segments of the supply of goods. However, the supply of services continues to be favorable due to the end of the pandemic, although part of consumption reflects precisely the accumulation of stocks by households and businesses.

According to EcoGo estimates, economic activity had a modest growth of 0.3% in April compared to March. This brings the first quarter expansion down to 4.3% from the 6% rate it led.

“We are seeing a cooling for the second quarter and also for the rest of the year due to currency restrictions that complicate imports. It will therefore be necessary to decide between a higher exchange rate or a recession. I think we’re going for the second one, “said Guido Lorenzo, director of the LCG consulting firm.

Economist Andrés Borenstein made it clear that last month included some positive indicators. “The concrete did well in May. My interpretation is that the April and May numbers will be very close to zero, with some sectors rising and others falling. None spectacular and none disastrous. despite recent industry and construction data – with increases of around 5% -, they give the feeling that April activity will be better than expected “.

AQ