Retail sales rose by 2.7% YoY in November, below both - our forecast of 3.1% and consensus of 3.4% (as per Bloomberg). The calendar adjusted quarterly annual rate of retail sales rose to 2.8% in November (down from 3.6% in 3Q23). Also using calendar adjusted figures, the real wage bill, the key determinant of private consumption, rose at a solid quarterly annual rate of 9.5% yoy in November (practically unchanged from 3Q23), with formal employment softening to 3.2% (from 3.6%), while nominal wages increased 10.7% (practically unchanged from 3Q23). The real wage bill is also supported by lower inflation. Real consumption credit from commercial banks continues to expand at a strong pace (13.2% quarterly YoY in November), while remittances converted to pesos fell by 5.0% (explained by an appreciated currency) but recovering from -8.1% in 3Q23. At the margin, retail sales expanded at a soft 0.1% MoM/SA in November, taking the qoq/saar to -0.6% (from 3.5% in 3Q23).
Our take: The gradual deceleration in retail sales growth in November is consistent with our expectation of a softer GDP expansion in the last quarter of last year, relative to the first three quarters of 2023. Our GDP growth forecast for 2023 stands at 3.4%. We expect activity to decelerate to a still above trend growth of 2.8% in 2024, supported by an expansionary fiscal stance which will mitigate a slower external demand.
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Julio Ruiz