Midwest region posted the highest growth in 2022

The Central Bank’s Regional Bulletin revealed that the Midwest region posted the highest growth last year.

Despite the growth in 2022, driven mainly by the services sector, economic activity contracted in all five regions in the fourth quarter, “corroborating the ongoing slowdown,” according to the report.

“Boosted by the return of mobility after the end of the restrictions imposed during the pandemic, the services sector maintained an expansion trajectory throughout the year, closing 2022 with significant growth,” the document highlighted.

Heterogeneity

According to the Central Bank, economic activity grew in 2022 “with some heterogeneity in sector performance,” despite the slowdown over the course of the year, particularly in the fourth quarter.

The tertiary sector also slowed in the fourth quarter. “The labor market remained on a favorable trajectory, with continued creation of formal jobs, although fourth-quarter data indicate a loss of momentum at the margin,” said the Central Bank.

Growth in agricultural production was responsible for the Midwest leading the rise in economic activity last year, along with the food industry and the strong expansion of construction for the second consecutive year, as well as progress in the services sector.

In the period, the region expanded by 5.9%, with a significant contribution from the larger corn harvest and from services provided to households, in the wake of the economy’s reopening after the pandemic.

The Northeast grew 3.9% in 2022, with the recovery of the services sector and the favorable performance of agriculture and construction. Manufacturing continued to show negative variation, but to a lesser extent than in the previous year.

Employment continued to recover in both the formal and informal labor markets, but incomes fell year on year.

On the other hand, the Southeast economy slowed in 2022 compared with the previous year, with a decline in retail and a slower pace of expansion in industry and services. For the year, growth was 3.5%. In the South, activity grew 1.2%, the lowest rate among the regions, after having “posted a broader recovery in 2021.”

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