Isolated and, for the moment, very preliminary data support the official thesis and also the consensus of economists that the slide in economic activity finally stopped in March. That expectation was clearly reflected in the survey that the Central Bank carries out every month among consulting firms and private analysts, who do not anticipate growth for the second and third quarters of the year but also no more falls. Of course, the floor level it reached – the most negative estimates indicate a year-on-year drop of between 5% and 6% for the industry, for example – prevents people and others from expressing the slightest relief.
In fact, no one on the economic team ventures the failed phrase “the worst is over” although the truth is that this is precisely the spirit with which the Government seems to approach economic management in the second quarter of the year.
For now, this hidden and cautious optimism is supported by indicators that reflect some pulse in activity. The most important of them is the statistics of the automotive industry corresponding to April, which confirms resounding falls in the annual comparison and also in the accumulated one for the first four months. However, it also showed a light at the end of the tunnel: the production level in April was higher than in March, which is the first time in the last 5 months.
“Green shoots in the real economy,” the consulting firm Outlier, directed by economist Gabriel Caamaño, noted in its daily report. “Yesterday the first primary activity data for April 2024 was known, this is automotive production released by ADEFA. In this regard, a monthly recovery of the seasonally adjusted series of 3% was observed, which, although it was not enough to reverse the entire fall in the same terms of comparison as in March (-4%), it did cut the streak of 5 variations negative monthly. The last rebound had been in November 2023,” the report highlighted.
In this way, the production level in April 2024 was 17% below that of November 2023 and accumulated a decline of 26% compared to August of last year, when the last maximum was recorded. Meanwhile, the accumulated figure for the first quarter of 2024 marked a year-on-year drop of 22 percent. What was said; The floor that the economy reached is very low but, looking at the half-full of the glass, it would not go down any further. From there until it starts to rise, the challenge is enormous. For example, the automotive sector itself accounts for this complex context since, although production managed to recover, sales and, for the moment, exports remained on the decline.
In any case, it is not the only data that encourages incipient optimism. Earlier in the week, another indicator was known, in this case referring to internal demand and associated with consumption. The conclusion was similar: the recoil is strong and the photo is negative. The film, however, begins to show signs of animation. This is what was suggested by the results of the sales measurement of retail businesses published by the Argentine Confederation of Small and Medium Enterprises (CAME), according to which sales in April were slightly higher than those in March.
CAME’s IVIM (retail sales) index, a current indicator that measures monthly the evolution of the turnover of SME retail businesses, showed an increase of 1.6% last month compared to the previous one, although in the interannual measurement it is sustained a sharp drop of 7.3 percent. This percentage, however, is also lower than that of March compared to March of last year, when the contraction exceeded 12% year-on-year.
To some extent, this hint of improvement in the consumption index is consistent with the same trend that salaries seem to have started in March according to different official indicators. For example, the RIPTE, which measures the evolution of “stable” formal salaries (with a continuity of more than one year), which rose 14% when inflation for the month was 11 percent. This led the President to assure that salaries began to recover that month, although at the moment it seems to be more about “sparks” of reactivation than an ostensible recovery.
To the point that caution predominates in the economic team itself. “We still do not have firm indicators that the floor has been definitively reached, although we do have indications that make us agree with the consensus that the decline in activity stopped in March,” they admitted. to Infobae.
