Argentina | Real-time consumption monitoring (Mar 31, 2021)

Total consumption continues to be unable to grow steadily, remaining at around 0% YoY. The effect of the beginning of the lockdown a year ago is starting to be felt in the different categories. Based on our indicators, activity is expected to grow again in 1Q21, although a second wave of contagions could weaken consumption.

Key points

• Key points:
• During the first half of March 2021, consumption measured in constant currency remained erratically around 0% YoY. Spending on goods slightly extended its YoY decline with respect to February, but consumption in services significantly reduced it.
• One year after the start of strict confinement, we observe a collapse in real terms of the Food category and a significant growth of non-essential activities that had collapsed at the same date in 2020.
• Official GDP data for the last quarter of 2020 confirmed the behavior captured by our high-definition indicator of fuel consumption correlated to the level of activity. We forecast a further increase in GDP for the first quarter of 2021.
• In view of the second wave of contagions, the doubt regarding the hardness of the sanitation measures and whether this will help contain the inflationary escalation (as verified in 2020), which has as a trade-off a negative effect on consumption, arises.

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