GDP increased in 1Q23 by 1.3% yoy, in line with the figure anticipated by the monthly GDP proxy (EMAE) following an expansion of 1.5% in the previous quarter. On a sequential basis, GDP rebounded 0.7% qoq/sa, partially offsetting the decline in 4Q22 (-1.7% qoq/sa). The rolling four-quarter GDP growth decelerated to 4.1% from a downwardly revised 5% in 2022.
Final domestic demand increased by 2.1% qoq/sa in 1Q23 from a drop of 1.6% in the previous quarter. Public and private consumption rose by 2.7% and 2.1%, respectively. Fixed investment increased by 2.1% in the quarter. On an annual basis, domestic demand (excluding inventories) rose by 4.2% yoy, reflecting a 6.0% yoy increase in private consumption and a gain of 1.6% in public consumption. Gross fixed investment slipped by 0.6% in the period. Regarding external demand, exports decreased by 6.0% yoy, affected by a severe drought, while imports rose by 2.9% yoy.
We forecast a 4% contraction in activity this year, reflecting the harsh drought and the fragile macro fundamentals.