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“Bad things will pass, but not that fast…”
The Industrial Production Index (IPI, 2005=100) contracted further – but
by a slower pace – of 14.7% YoY in Feb ’09 (Jan ’09: -19.8% YoY) amid
continued drop in manufacturing output (-18.8% YoY), mining activities
(-7.3% YoY) and power generation (-3.0% YoY).
Although the YoY drop in Feb ’09 eased – in tandem with the earlier
released Feb ’09 external trade figures – we still expect industrial
production and export growth to remain in the red at least until 3Q09,
mainly as imports of intermediate goods i.e. mainly inputs for
manufacturers/exporters continue to fall.
For Jan-Feb ’09 industrial production fell by 17.4% YoY (4Q08: -9.1%
YoY; Jan-Feb ’08: +9.6% YoY), signaling a contraction in 1Q09 real
GDP, which we currently expect to be -4% YoY (4Q08: +0.1% YoY)
under our full-year forecast of -1.3%.