Gross fixed investment deepened its decline in April, falling by -12.5% year-over-year (vs. -0.3% previously), marking eight consecutive months of contraction. Within this, machinery and equipment contracted by -16.0% year-over-year from -0.4%; in particular, the domestic subcomponent decreased by -14.7%, and the imported one by -16.7%. Construction also intensified its decline, falling by -9.2% (vs. -0.2% previously), making it nine consecutive months of decreases, with non-residential investment dropping -13.9% and residential investment -3.7%.
In seasonally adjusted monthly terms, gross fixed investment also fell after two months of marginal gains, by -1.7% m/m (from 0.2% previously), with a -1.1% m/m drop in construction and -2.2% in machinery and equipment. The widespread decline in investment components was impacted by uncertainty and volatility related to changes in U.S. trade policy, as well as internal economic factors, which we believe will continue to drive greater risk aversion among investors, potentially leading to continued declines in investment in the coming months.
In April, private consumption fell less than expected (-3.6% y/y), declining by -1.7%, as a result of a sharp drop in imported goods consumption of -14.3% compared to the same month last year, with a notable -18.8% contraction in imported durable goods. Meanwhile, domestic consumption increased by 1.1% y/y, driven by durable goods (3.9%), while services grew by 1.3%.
However, in seasonally adjusted terms, private consumption rose by 1.1% compared to the previous month, recovering from a -0.2% decline, with domestic goods rebounding by 2%, while imported goods fell by -1.1%. In annual seasonally adjusted terms, private consumption increased by 0.7%, with domestic consumption up 3.1%, while imported consumption contracted by -8.3%. Looking ahead, consumption is also expected to weaken in the coming months, as formal job creation remains almost stagnant and remittances face downward pressures.
—Rodolfo Mitchell & Miguel Saldaña
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