Gross Fixed Investment (GFI) grew 6.1% yoy in April (from 9.0% in March), above our forecast of 5.0% and broadly in line with market consensus of 6.5% (as per Bloomberg). Adjusting the figures for working days, GFI grew at a faster pace (7.2%), taking the quarterly annual rate to 9.4% (from 9.3% in 1Q23). According to the calendar-adjusted breakdown, quarterly annual growth in construction investment stood at 3.5% in April (from 3.1% in 1Q23), while machinery & equipment investment stood at a strong 17.1% (from 17.3%).
At the margin, GFI deteriorated in April but momentum remained positive.
April’s GFI fell by 0.3% mom/sa, taking the quarter-over-quarter annualized growth rate (qoq/saar) to 9.8% in April (from 11.4% in 1Q23). GFI is supported by machinery & equipment investment (qoq/saar of 30.0% in April, from 27.9% in 1Q23), while construction investment is at a weak -2.2% (from 3.9%).
Private consumption momentum is also positive. The monthly proxy for private consumption expanded by 3.7% yoy in April (using calendar-adjusted figures), with the quarterly annual growth rate at 3.5% in April (from 4.5% in 1Q23). At the margin, private consumption expanded further to 0.5% in April (from 0.3% in March), taking the qoq/saar figure to 5.9% (from 10.2% in 1Q23).
Our 2023 GDP growth forecast of 2.4% has an upward bias amid resilient activity.
Still, we expect softer activity in 2H2023 and 2024 (we expect GDP growth of 1.3%) due to weaker activity expected in the U.S.