As reported yesterday by the Dane, domestic demand fell 0.1 percent on-year in the first quarter of 2023. This deterioration was led mainly by the 10.3 percent drop in gross capital formation, in contrast to the 21 percent increase in the same period of the previous year.
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“This indicator includes a very good part of the investment in the manufacturing sector. Special attention must be paid to this dynamic that represents the potential to generate new formal jobs in the economy”, said Bruce Mac Master, president of Andi.
For his part, household spending increased by 2.9 percent compared to the figure of 10.6 percent of the same period of the previous year. What increased the most were services (6.4 percent) and non-durable goods (1.5 percent). On the contrary, people are no longer buying semi-durable (-2 percent) or durable (-8.2 percent) goods.
The main economist Scotiabank Colpatria explains that household consumption was boosted by the non-durable goods, such as food and the market in general. In addition to this, he said that families opted for services such as going to school and taking transportation.
However, he pointed out that durable goods in the economy, such as televisions and automobiles, among others, slowed down and even fell during the first quarter of this year.
On the other hand, general government final consumption spending fell 0.2 percent in the first quarter of 2023 compared to 6 percent in the same period of the previous year.