Growth slows as consumption and capex weaken
From AB Capital's The Opening Bell: Three Moves
Event
Consensus expects 1Q26 GDP growth at around 3.4%, below the 5.4% posted last year and under the government's 5-6% target. Weak household consumption, softer government spending, and declining investments weighed on overall economic momentum.
View
In our view, the slowdown reflects a convergence of cyclical and structural pressures, including tight financial conditions, weaker confidence, and early inflation pass-through. Consumption remains constrained, while delayed fiscal execution and contracting capital formation continue to limit growth impulse across sectors.
Catalyst
Key sensitivities include oil prices, inflation trajectory, and fiscal spending pace. If oil remains elevated, we think 2Q26 growth could stay in the 3.5% to 4% range as consumption weakens further. Faster fiscal disbursement could partially offset these pressures.
Action
We think investors should position for a softer growth environment in the near term. Favor defensives and sectors with stable demand. Monitor consumption trends and fiscal execution closely, as these will determine the pace and sustainability of any recovery in the coming quarters.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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