April Domestic Spending Lower amid Falling Private Investment (Business Brief No.3433 Full Ed.)

• Private investmenthad contracted (-)0.6 percent MoM and was down (-)1.1 percent YoY in April, against 3.1 percent growth YoY in March, , led by imports of capital goods that had dropped for the third consecutive month. Private consumption, although contracting (-)0.5 percent MoM, managed to grow 1.7 percent YoY, close to the 1.8 percent achieved in March. VAT collections, however, had increased in line with domestic spending. Meanwhile, despite a high 2012 base, imports of consumer products and automobile sales had posted reasonable growth.

• Exports grew 3.7 percent YoY in April, down from 4.2 percent YoY in March. This data represents a similar situation to that seen in industrial manufacturing, particularly products that focus on international markets, which fell for the third month running by another (-)13.0 percent, versus (-)8.6 percent in March. When combined with the slowdown in domestic demand, manufacturing production for April had regressed to a contraction of (-)3.8 percent YoY, after growing 1.2 percent in March.

On the whole, ebbing domestic spending and industrial manufacturing during April mirrored the fact that our economy has moved forward into the second quarter with continued decline in domestic spending, as well as a delayed export recovery. In light of this, KResearch maintains that 2Q13 GDP growth may decelerate to 4.3 percent YoY, dropping from 5.3 percent growth YoY in 1Q13.