2026/07/15 | Vittorio Peretti, Carolina Monzón, Juan Robayo & Angela Gonzalez
Robust retail activity offsets manufacturing weakness. Retail sales rose by 11.7% YoY in real terms in May (+14.9% in April), in line with the Bloomberg median and above our call (10.8%). Core retail sales (excluding fuels and vehicles) increased by 0.7% MoM (+0.8% in April), resulting in a 10.9% real YoY increase (+10.3% in April). Meanwhile, manufacturing output rose mildly by 0.1% MoM/SA in May (+1.1% in April), leading to a fall of 0.4% YoY in real terms (+1.7% in April), well below the Bloomberg median and our call of 1.9% YoY.
Activity indicators picked up at the margin. During the quarter ending in June, manufacturing increased by 1.7% YoY (+1.6% in 1Q26). At the margin, manufacturing rose by 7.2% QoQ/saar (+3.5% QoQ/saar in 1Q26). Retail sales increased by 13.4% YoY during the quarter ending May (+11% YoY in 1Q26), driven by vehicle sales and IT equipment. Sequentially, core retail sales increased 20% QoQ/saar (+12.6% QoQ/saar in 1Q26), a level not seen since December 2021.
Our take: Industrial activity remains weak, while consumer spending stays resilient, supported by a tight labor market and a significant real increase in minimum wages. We expect GDP growth of 2.2% in 2026 and 2.4% in 2027.