Growth yes, but no momentum still

► No momentum yet, but with the opening up of cafes and restaurants, albeit under some constraints, the services sector could jumpstart. This is a potential, obviously.

► Tourism-related services are still weak, at least compared to industry, which showcased 10% growth. This implies that not only from the current account deficit and exchange rate stability, but also from the vantage point of growth, tourism is critical this year.

► Construction contracted by 12.5% and there is no sign that it will recover soon. Actually it is the most dependent sector on interest rates because mortgage rates and sales trace a perfect scissors shape.

► Private consumption is as always the key here. Consumer durables contributed a lot, as in the previous quarter, by posting a 42.3% expenditure increase. Machinery and equipment expenditures have also risen by a hefty 38.7%.

► This is a problematic statistic because investments can’t easily pick up under extreme duress. However, stocks shaved off 1.8 percentage points from growth. So, stock replenishment may be in order.

► The last three years GDP growth average is c. 1.9%, easily subpar by any metric. The 7.5% of 2017 was basically due to the Credit Guarantee Fund and 28-week continuous portfolio capital inflows. It was also an outlier, in a sense.

► As the seasonally- and calendar-adjusted, quarter-on-quarter graphic depicts, the last quarter’s growth is rather low. But it also shows how steep the movement between the second and third quarter was.

► There will be a huge base effect in April-May. This would raise yearly unadjusted growth to very high levels. Hence, barring any new shock, I expect 4-6% GDP growth this year. It is also funny to observe that 2020 yearly growth is higher than 2019 growth.