April disappointment

The data for April were appalling. Economic activity was much weaker than expected across a wide swath of the economy, with imports, industrial output and fiscal revenue hit particularly hard. Optimists can point to two factors. First, there were fewer working days in April this year than last. This hit import duties, according to the finance ministry, and other data series will have been similarly affected. Second, the statistics bureau rolled out a new direct method of data collection in February, possibly distorting y/y growth comparisons. But neither explanation is entirely satisfactory. More holidays should have boosted consumer spending, but retail sales also slowed. And the weakness was not confined to data collected by the statistics bureau. We had already concluded that Q1 GDP growth was weaker than the official figures showed. April’s data strongly suggest that the economy has continued to slow.