Activity fell by 1.9% mom/sa in April, from a gain of 0.4% in the previous month. The EMAE (official monthly GDP proxy) increased by 1.5% qoq/saar, from a loss of 2.7% qoq/saar in 1Q23. Activity contracted by 4.2% yoy in April, outpacing the Reuters market estimate of a 1.5% decline.
Primary activities plummeted on a year-over-year basis in the quarter ended in April, affected by the drought. Primary activities decreased by 12.3% yoy in the period (from -2.1% in 1Q23), affected by a poor grain harvest. All other sectors expanded in the quarter. Services registered a 4.9% yoy gain in the period, from 2.9% in 1Q23. Construction came in at 3.5% yoy (from 2.7% previously), followed by Manufacturing, which expanded by 1.7% yoy (from 2.9% in 1Q23).
At the margin, all sectors but primary activities improved during the quarter ended in April, according to our seasonal adjustment. Primary activities decreased by 30.3% qoq/saar in the period, from a loss of 5.9% qoq/saar in 1Q23. The Service sector posted a gain of 17.8% qoq/saar (from 6.8% qoq/saar in March) and the Manufacturing sector expanded by 11.4% qoq/saar (from a gain of 7.0% in 1Q23). Construction increased by 23.5% qoq/saar in April, from a gain of 14.8% in 1Q23.
We forecast a 4% contraction in activity this year, reflecting the harsh drought and fragile macro fundamentals.