The economy slowed through April while Mulino builds his team with pro-market figures. We discuss the Mulino-Martinelli relation and its implications. The July election of the new Legislative Directorate is key for reforms.
First quarter data, as well as data from April, indicate that exports and total investment fell, while consumption and imports increased. The IMAE showed a decrease of 2.1% in March and YoY cumulative growth of 0.04% in the first quarter. We forecast 2% real growth for the remaining quarters and 1.3% for the entire year, which is on the conservative side, followed by a 4% surge in 2025. Available sectoral data in investment and construction through April show poor performance, while consumption is proving resilient. With the positive signals from the new administration, our 2025 GDP estimate could be surpassed; however, we remain vigilant regarding the economy's performance, particularly the impact of interest rates on consumption. In a makeshift move, the Minister of Economy and Finance approved the issue of promissory notes in favor of the Sovereign Savings Fund (FAP) to repay arrears. Moreover, President-elect José Raúl Mulino has announced his key policy advisors, and we discuss the relations between President-elect Mulino and former President and mentor Ricardo Martinelli. We suggest focusing political attention on the selection of the new Legislative Assembly's Board of Directors on July 1.
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