Consumption began the year with some negative signs, as reflected in various private and sectoral surveys. And the prospects for the near future are not very encouraging, according to the analysts’ view: it is that they point out that the acceleration of inflation and a lower availability of credit can threaten the recovery of domestic demand.
For example, according to the survey carried out by the CAME, SME retail sales fell 0.9% in February compared to the same month last year, to accumulate a decrease of 0.6% in the first two months. The shops sold 0.6% less than in January.
Mass consumption also fell in February. According to the survey by the consulting firm Scentia, it presented a year-on-year drop of 1.1%, accumulating a negative record of 1.4% in the first two months of the year.
The gap between the different sales channels was again evident in this sector: “Supermarkets maintain their positive trend, +8.3% this month, while Supermarkets contract -8.9%, maintaining the trend from several months to this part”.
The projections about what may happen in the coming months in terms of consumption are not very encouraging. “What we see is that we are on the way to a spending formula that is actually going to suffer: the income of Argentines with respect to the acceleration of inflation is going to deteriorate, but there is also a low level of savings, and the level of Debt is already high, with very little liquidity on the part of banks to lend or raise credit card limits above inflation, when they are financing the Government through bills and bonds,” Damián Di told Ámbito. Pace, director of the Focus Market consultancy.
“Then, the search for containment of the macro implies that the banks lend to the State, and the other side in the micro is that there is less level of accessible credit to compensate for this drop in income and available savings. With which, there will be a drop in consumer spending this year,” the analyst remarked.
For his part, Aldo Abram, director of the Libertad y Progreso Foundation, highlighted: “What is relevant will be the demand that will be for producers in the country. And there we have a series of problems. In the first place, income, because since there is no level of exports like the ones we had last year, it represents a reduction in income for all Argentines. That is to say that we are going to have to lower our spending compared to last year”.
“On the other hand, it is to see how much international financing we are going to have. This year, international organizations are supposed to give us fewer resources than those that expire. The third point that will help prevent this year from being a good one is clearly the issue of uncertainty: the perception of risk regarding Argentina is increasing and in this context, what people do is save more and invest less. And that obviously removes internal demand,” Abram remarked.
Source: Ambito
