The Day at a Glance | February 21 2023

*Retail sales closed 2022 with a slight acceleration.

*Mixed results in the Eurozone´s PMI´s.

*After Biden´s visit in Ukraine, Putin announced that Russia will halt its participation in New Start nuclear treaty.

*Europe and China expressed dismay regarding the armed conflict in Europe and called on the international community to “stop fuelling the fire”.

*Inflation in Canada increased 5.9% in January.

*The Secretariat of Finance and Public Credit will carry out a government securities swap auction on February 24th, which includes both M bonds and Udibonos.

Economic environment

Retail sales rebounded in December as they logged a 0.1% real monthly increase. This reading compares positively with the -0.2% recorded in November and resulted in a 2.5% annual increase – also higher than the previous 2.4% figure. In a disaggregate manner, stationery and leisure activities logged the largest annual growth, with a 9.6% increase, followed by textile product sales, clothing accessories and footwear (7.2%). However, declines in online sales (-11.7% real annual) and in food, beverages and tobacco (-3.8%) limited the index´s growth. Of these figures, we highlight the decrease in food and beverage sales, which mainly responds to high inflationary levels as they seem to have reached their peak after logging a 14.14% annual figure. Even though the overall trend in retail sales shows a slowdown, we consider it positive that sales continue to report positive figures – even more so, that these variations are within the range that was seen in the pre-pandemic period.

Preliminary figures in the Eurozone indicate that the Composite PMI reached a 9-month high in February and set at 52.3 points.  This progress was boosted by the services sector, with a 53.0 PMI reading, its highest level since June. However, the manufacturing index recorded a 48.5 point figure, similar to what was seen in January (48.8), and remained in contractionary territory for an eighth consecutive month. Overall, the reading is positive as it shows greater growth in the region – as well as more moderate prices; however, pressures continue, mainly on the wage front.