April’s industrial production (50.1% y/y) and distributive sales (66.2% y/y) data, as expected, reflected a robust economic performance. Strong monthly data would post a strong growth for April’s GDP of around 33%–37%. Besides the firm economic data reported, the extreme low base will provide a big push to April’s performance.

However, the economic performance in May and June remains a challenge. There is more downside risk due to the restrictive measures to contain the high numbers of Covid cases. Our full-year growth is anticipated to be around 4.5%. The upside and downside would depend on vaccinations and the management of Covid cases.

• April’s industrial production and distributive sales data, as expected, reflected a robust economic performance.

• IP growth was supported across the board with manufacturing up 68% y/y (March: 12.7% y/y. Domestic-oriented industries grew 110.9% y/y (March: 13.4% y/y) while export-oriented industries expanded 52.8% y/y in April (March: 12.4% y/y) driven by E&E.

• Meanwhile, electricity rose 22.9% y/y (March: 10.3% y/y), while the mining sector climbed 14.3% y/y (March: -1.9% y/y), which is also the first positive growth in 14 months.

• Distributive trade sales grew 66.2% y/y in April (9.3% y/y in March). The strong sales growth was driven by motor vehicle sales, surging 1,551% y/y (March: 40.7% y/y), retail sales reading at 56.5% y/y (March: 10.5% y/y), and wholesale trade at 40.5% y/y (March: 1.8% y/y). The SST tax holiday plus Ramadan sales as well as online sales boosted the overall trade.

• On the monthly economic performance, GDP in April would post a strong growth of around 33%–37%. Besides the strong economic data reported, the extreme low base will provide a big push to April’s performance.

• However, the economic performance in May and June remains a challenge. There is more downside risk due to the restrictive measures to contain the high numbers of Covid cases. Our full-year growth is anticipated to be around 4.5%. The upside and downside would depend on vaccinations and the management of Covid cases.

Source: AmInvest Research - 14 Jun 2021