Nothing but uncertainty
We have cut our 2022 GDP growth forecast to 3%, with a downward bias. A contraction phase seems to be taking shape. For February and March, we again expect adverse effects from the pandemic. In addition, external conditions have deteriorated, because of the effect of Russia’s invasion of Ukraine.
The shift in household consumption from goods (especially durable goods) to services continued in January. For the third consecutive month, seasonally-adjusted retail sales registered a negative monthly variation. Without the strong impulse from pension fund withdrawals and state aid, the deceleration in retail sales will continue throughout 2022. During January and February, households made use of some of the liquid assets accumulated during the pandemic.
After two months of contraction, manufacturing had a seasonally-adjusted monthly expansion in January. As is usually the case in manufacturing, a few sectors had a disproportionately high impact. In January there was a deep contraction in mining production. As in previous events, we assume this is a one-off, short-lived phenomenon. We were struck by the monthly drop of 3.8% in the seasonally-adjusted IMACEC’s "other goods," where construction predominates. This is at odds with the advance in the stock of housing loans, and a slight improvement in confidence. In the construction sector, more than others, we see little room for a recovery: there is a slowdown in demand, political uncertainty continues, construction costs have increased and interest rates are rising.
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