Industrial production is likely to have rebounded rather significantly in April after a modest decline in March, though its year-on-year growth will remain slightly below zero. The sizeable decline in year-on-year export growth from -4.5% in March to -8.0% in April was largely driven by base effects, while the exports in April excluding ships and oil products actually jumped from March. “Based on exports and industry data, a strong rebound in both the electronics and auto sectors is expected after the dip in March – while other sectors will be flat from the previous month. Societe GHenerale’s forecast assumes that April industrial production will be 1.5% higher than the Q1 average, which would not support our call for a BoK rate cut in June based on relatively weak Q2 activity data. As a result, May exports data will be important to validate our BoK call”, according to Societe Generale.
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