2026/06/16 | Vittorio Peretti, Carolina Monzón, Juan Robayo & Angela Gonzalez
Upbeat retail dynamics outpace manufacturing. Retail sales rose by 14.9% YoY in real terms in April (+14.6% YoY in March), well above the Bloomberg median (11%) and our call (9.5%). Core retail sales (excluding fuels and vehicles) increased by 1.1% MoM (+0.8% MoM in the previous month), resulting in a 10.4% real YoY increase (+10.3% in March). Meanwhile, manufacturing output rose by 1.3% MoM/SA in April (+0.2% in March), leading to an increase of 2.0% (+3.8% YoY in March), below the Bloomberg median (3.3%) and closer to our call (2.5%).
Strong activity dynamics at the margin. During the quarter ending in April, manufacturing increased by 2.3% YoY (+1.6% in 1Q26). At the margin, manufacturing increased 5.6% QoQ/saar (+3.3% QoQ/saar in 1Q26). Retail sales rose by 13.5% YoY during the quarter ending April (+11.2% YoY in 1Q26), driven by vehicle sales and IT equipment. Sequentially, core retail sales increased 18.7% QoQ/saar (+13.2% QoQ/saar in 1Q26).
Our take: While industrial activity growth is moderate, consumer spending continues to hold up, supported by a tight labor market and the significant real increase in the minimum wage. The April print of the coincident activity indicator (ISE) will be released on Thursday. After the retail sales upside surprise, we now expect a 4.0% YoY increase (+3.3% previously expected), supported by services and public administration, but partly offset by weakness in mining and construction. Our scenario considers a terminal monetary policy rate of 12.5%.