GDP falls for the fourth consecutive month: -0.63% in August

The INEI figure confirms what was anticipated by the Ministry of Economy and Finance (MEF): the eighth negative month. Thus, GDP fell 0.63% in August and accumulates a decline of 0.58% so far this year (see infographic).

The sectors that explain the monthly contraction are construction (-9.57%), financial (-9.68%), manufacturing (-4.11%), agriculture (-4.05%), telecommunications (-2.35 %), accommodation and restaurants (-0.65%) and transportation (-0.28%).

On the other hand, production increased in mining and hydrocarbons (5.17%), commerce (2.83%), fishing (49.14%), electricity, gas and water (3.20%), services provided to companies (0.77%) and other services (2.78%).

For economist Ronald Casana, from Equilibrium Financiero, August has also been hit by the El Niño phenomenon and inflation, an indicator that is declining, but its impact on consumption is not yet reflected.

Casana specifies that the retraction of private and public investment is having an influence that does not go unnoticed, both in construction – which is reflected in the fall in cement consumption – and in manufacturing, two areas with a high impact on the GDP.

Focusing on manufacturing, its decline is due to the lethargy in domestic consumption, the reduction of state purchases from small and medium-sized companies and the low production of export goods due to weather events. They have already been down for five months, almost in line with the general GDP.

According to the INEI, in August the non-primary subsector decreased due to lower production in the consumer goods and intermediate goods industry, unlike the primary subsector that did grow in the branch of processing and preserving fish, crustaceans and mollusks in 105.93%, as a result of the exploratory fishing authorized in said month.

Lost third trimester?

“It is almost a fact that we will have three consecutive quarters of decline”says economist Luis Arias Minaya; and even the Minister of Economy, Alex Contreras, who usually has more optimistic projections, slipped that possibility by stating that September would not show a recovery either.

And although Casana also agrees with this expectation, he maintains that November and December could be months with growth due to the Christmas campaign, which will fuel domestic consumption, which will be subject to the impact of The boy be mild or moderate.

Furthermore, in the last month of the year the adjustments to the reference interest rate will begin to be reflected, “especially in corporate loans”; The last one to see the impact will be consumer credit, according to the specialist.

Likewise, another factor that must be taken into account for the third quarter of the year is whether there will be a second anchovy fishing season; and regarding external factors, how the conflict is developing in the Middle East, whose countries involved are not the main producers of this resource, but Iran and the United Arab Emirates are.

“We have to wait this whole month, if the conflict between Israel and Palestine continues, if other countries get involved. So, that is going to have an impact, but I believe that between 30% and 40% of what the impact of the war between Russia and Ukraine was, that did raise the price of oil much more, and that makes freight and transportation more expensive. products themselves”, he concluded.