Economic A–ctivity saw further improvement in April led by consumption and foreign trade though industry indicators remain weak. Our Activity Index 3m m.a growth improved to 3.6% (Mar: 2.8%). Momentum indicator remained in positive territory. The key positives were the strong growth in 2W/PV/Tractor sales, accelerating foreign trade, decline in inflation and strong fund flows. The key negatives were the sharp fall in CV sales and weak industry indicators. Improvement in growth but not broad-based: Economic Activity saw small improvement in April with our Activity Index 3m m.a. growth improving to 3.6%, (Mar: 2.8%). Monthly growth though moderated to 3%. Momentum indicator continues to remain in positive zone with 15 indicators improving, vs 13 in March and 10 deteriorating, vs 9 in March.
Foreign trade, autos the key positives; CV and credit the key negatives: The improvement in activity from December lows has been led by strong consumption growth and pick-up in foreign trade. Industry indicators though continue to remain weak with no indicator seeing strong growth. Foreign trade remained strong with export growth at 19% and imports at 43%.
Freight traffic remained stable with railways at 4.5% and port at 6.4%. 2W/PV/tractors sales growth all accelerated in April to 7%/15%/25%, respectively. CV sales declined 23% y-o-y in April with MHCV sales down 54%. Most industry indicators were muted with electricity/steel demand growth at 3%.
Q4 Corporate sales growth moderated to 7% (Q3: 10%) with Margins stable y-o-y. Cement data is perplexing with company data showing y-o-y growth vs 12% decline in government data. Inflation saw sharp moderation in April with WPI at 3.9% and CPI at 3%. GDP growth slowed to 2-yr low in Q417, likely a lagged trend to our Activity Index.