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Private consumption was the main drag to internal demand in the month

Julio Ruiz


Gross Fixed Investment (GFI) grew 6.6% yoy in November (from 6.20% in October), above our forecast of 4.9% and market consensus of 5.5% (as per Bloomberg). Adjusting the figures for working days, GFI grew at a slower pace of 5.9%, taking the quarterly annual rate to 5.4% (from 3.7% in 3Q22). According to the calendar-adjusted breakdown, quarterly annual growth in construction investment stood at a weak -1.4% in November (from -4.3% in 3Q22), while machinery & equipment investment stood at 13.8% (from 14.3%).

GFI registered a null sequential expansion in November (after growing at a solid 1.4% mom/sa in October), with momentum remaining positive. The quarter-over-quarter annualized growth rate (qoq/saar) stood at 5.5% in November (from 1.2% in 3Q22). Looking at the breakdown, construction investment qoq/saar improved to 5.4% in November (from -4.9% in 3Q22), while machinery & equipment investment came in at 1.7% (from 8.2%). While GFI has been improving at the margin driven by construction investment, we note it remains 3% below the level at beginning of the current administration (December 2018).

Private consumption momentum is cooling down. The monthly proxy for private consumption expanded by 4.0% yoy in November (using calendar-adjusted figures), with the quarterly annual growth rate at 5.1% (from 6.3% in 3Q22). At the margin, private consumption fell by 0.6% mom/sa, taking the qoq/saar figure to 2.4% in November (from 3.5% in October).

We expect activity to slow down this year to 1.3% (down from a preliminary GDP growth of 3.0% in 2022) dragged by a soft expansion of the U.S. economy and a tighter monetary policy stance.

Julio Ruiz