Source: Diario Financiero

The Monthly Indicator of Economic Activity (Imacec) registered a year-on-year drop of 2.1% in March, the Central Bank reported on Tuesday, in a decline that was deeper than most market estimates.

Given this Imacec result, two quarters in red were completed in year-on-year terms, with a January-March period where activity would have fallen 0.9%, which in any case is less than the 2.3% drop observed in October-December of 2022.

The Central Bank indicated that in March 2023 the seasonally adjusted series decreased 0.1% compared to the previous month and fell 1.9% in twelve months. The month recorded the same number of business days as March 2022

“The annual variation of the Imacec was mainly explained by the drop in mining and commerce. Meanwhile, the decrease in the Imacec in seasonally adjusted terms was explained by most of its components, which was partially offset by the increase in services” he said about the variation in March.

Analysts’ projections for Imacec’s performance pointed to a drop of between 1.3% and 2.3%, after the drop in industrial production and trade activity that month. Market consensus in the Bloombera survey pointed to a 1.7% year-on-year drop in the Imacec in March.

The finance minister. Mario Marcel pointed out that “it is not debatable” that the economy is in the midst of a technical recession.

“The definition of a technical recession is two quarters of negative variation compared to the previous quarter, seasonally adjusted. That happened in the first three quarters of last year. Now, on the contrary, we have two quarters in a row of positive variations compared to the previous quarter seasonally adjusted (+0 ,1% and +1% respectively)”, he argued.

In a conversation with ADN radio, the head of the Treasury explained that the monthly figure compared to the previous month has a “much smaller drop and, on the other hand, when one removes the mining company, which is the factor that contributed the most negatively, it goes to be a positive number.

So he points out that “a year ago the economy was in a downward inflection, today the economy is in an upward inflection.”

Sectoral impact

payment services,

As some analysts well anticipated on Friday, the figure would turn red affected by mining, as verified by the Central. Production in this area decreased 8.5%, according to the report, which added to the 2.5% stumble in the manufacturing industry, translated into a 5.5% decline in the production of goods.

In seasonally adjusted terms, the contraction was 0.7% compared to the previous month.

Commercial activity also suffered in annual terms, presenting a decrease of 5.4%. This result reflected the performance of the retail segment, where lower sales were recorded in supermarkets, department stores, and specialized clothing and footwear stores.

To a lesser extent. wholesale trade also fell, explained by the sales of raw materials, food and household goods.

In contrast, the automotive trade presented positive results.

As has happened in recent times, services remained in blue and increased by 0.9%, with those in the personal area -such as health and education- making the greatest contribution, followed by business

The seasonally adjusted result showed a growth of 0.9% compared to the previous month.