Ventodivino
מגן ולא יראה
Stralci di un rep di JPM
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Signs of recession
The timeliest economic activity indicators point to a recession (defined as two consecutive quarterly GDP contractions). On the supply side, activity data available for June show auto production plunging 19%m/m, while cement sales (a proxy for construction) declined 1.7%m/m, sa, the third consecutive drop. Thus, cement sales declined 10.3%q/q in 2Q18, and we foresee another negative quarter ahead.
On the demand side, auto sales plummeted 28.7%m/m, sa in June, suggesting a broad drop-off in durable goods consumption. Imports data, available through May, point in the same direction, with a 7.5%m/m, sa fall.
The correction of the peso overvaluation over the last three months will have a negative impact on investment. The 8.6%m/m, sa nose-dive in imports of capital goods in May reinforces this view.
- Headline and core CPI accelerated in June on FX passthrough pressures
- We raise our year-end 2018 inflation forecast to 30.5%oya, from 29%
- We expect FX passthrough pressures to ease ahead amid high real rates and slowing activity
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Signs of recession
The timeliest economic activity indicators point to a recession (defined as two consecutive quarterly GDP contractions). On the supply side, activity data available for June show auto production plunging 19%m/m, while cement sales (a proxy for construction) declined 1.7%m/m, sa, the third consecutive drop. Thus, cement sales declined 10.3%q/q in 2Q18, and we foresee another negative quarter ahead.
On the demand side, auto sales plummeted 28.7%m/m, sa in June, suggesting a broad drop-off in durable goods consumption. Imports data, available through May, point in the same direction, with a 7.5%m/m, sa fall.
The correction of the peso overvaluation over the last three months will have a negative impact on investment. The 8.6%m/m, sa nose-dive in imports of capital goods in May reinforces this view.
