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Our 2024 GDP growth forecast stands at -3.0%, with downside risks.
2024/06/28 | Andrés Pérez M., Diego Ciongo & Soledad Castagna

Activity declined sequentially again in April. According to the EMAE (official monthly GDP proxy), activity fell by 0.1% MoM/SA in April, after falling 1.0% in March, leading to a drop of 1.6% QoQ/SA in the quarter ended in that month (from -2.6% QoQ/SA in 1Q24). On a year-over-year basis, activity declined by 1.7% in April (falling less than the Bloomberg median of -3.5%) and contracting by 4.3% in the quarter ended in that month (-5.1% yoy in 1Q24).



All sectors contracted in April, except for primary activities. Construction fell by 24.6% yoy in the quarter ended in April (from -21.5% yoy in 1Q24), affected by the freezing of public works, while manufacturing contracted by 14.8% yoy in the same period (vs. a drop of 14.0% yoy in 1Q24). Services (including the commerce sector) registered a decline of 2.4% yoy in the period (vs. -0.8% in 1Q24), likely affected by lower real wages in the same period.  On the positive side, primary activities rose by 17.8% yoy in the period (vs.+9.6% yoy in 1Q24), reflecting the normalization of agriculture after last year's severe drought.



Our take: Our 2024 GDP growth forecast stands at -3.0%. Following the sharp contraction in economic activity in 1Q24, all eyes are now on the pace of the recovery. While small, the sequential contraction at the start of 2Q24 confirms the downside bias to our projection.