2026/03/24 | Julia Passabom, Mariana Ramirez &
Economic activity fell by 0.3% YoY in January, a deeper contraction than Bloomberg’s market consensus of a 1.4% expansion. After adjusting for calendar effects, activity grew by 0.3%, driven by the positive performance of agriculture (+1.6%, following an 11.4% expansion in December) and services (+0.8%, with 11 out of 14 subsectors showing growth). Meanwhile, industry decreased by 0.6% due to a decline in manufacturing.
When considering seasonally adjusted figures, the economy decreased by 0.9%, which is below the IGAE nowcast of -0.3% MoM and the consensus of a 0.5% contraction. By sector, industrial production declined by 1.1% MoM due to a broad-based contraction. Primary activities decreased by 3.7% MoM, marking the deepest contraction since April 2020 and contributing negatively by 0.15 percentage points. Services decreased by 0.6%, with negative performances in eight out of 14 subsectors, including retail sales, transportation, and leisure.
Our view: Today’s figures indicate that the economy experienced a downturn at the beginning of the year. The carry-over for 2026 is -0.32%. The agricultural sector showed a negative performance, reflecting lower production of some fruits and vegetables, as well as increased costs due to disruptions in the transportation of goods. The war in the Middle East has driven up fertilizer costs, adding further pressure to the sector going forward. The services sector was affected by transportation issues, reflecting the decline in manufacturing trade. Toward the second half of the year, we anticipate improved economic performance, assuming trade policy uncertainty subsides and the government increases public investment. We maintain our forecast of a GDP expansion of 1.5% this year.
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