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Our GDP growth forecast stands at 2.9% for 2022

Julio Ruiz


The monthly GDP (IGAE) increased 4.4% yoy in October (from 5.1% in September), in line with our forecast, but below market consensus of 4.9% (as per Bloomberg). Using calendar-adjusted figures (published by the Statistics Institute), the monthly GDP expanded at a faster pace (4.6%), taking the quarterly annual rate to 4.8% in October (from 4.1% in 3Q22). Looking at the breakdown (using calendar adjusted figures), the quarterly annual rate of industrial output was 3.3% in October (from 3.5% in 3Q22), while activity in the services sector grew 5.4% (from 4.4%).

Sequentially GDP posted a null expansion in October dragged by services sector (-0.1% mom/sa), while industrial production grew at 0.4%, with manufacturing output at 0.1%. Services sector was dragged by wholesale (-1.5%) and retail sales (-0.9%). The quarter-over-quarter seasonally adjusted annualized growth rate (qoq/saar) of the monthly GDP stood at 4.6% in October (from 3.5% in 3Q22), with manufacturing and services sectors at 2.0% (from 5.4%) and 5.0% (from 3.4%), respectively, while construction output stood at -6.4% (from -8.3%).

Our GDP growth forecast stands at 2.9% for 2022. Activity momentum will likely weaken in the last quarter of the year and throughout 2023 (we expect GDP growth of 1.3%) consistent with a softer external scenario.

Julio Ruiz