May 2014 | Macro economic review
08 May 2014

After suffering a temporary setback in April 2014, the year-on-year growth rate in May is back to upper single digits (6.3%). However, macro indicators suggest that the economic landscape has hardly changed between April and May.

This implies that the “base effect” continues to affect the observed growth rate swings. As mentioned in our last publication, the low growth rate of April was due to a spike in output level recorded in April of last year. For the same reason, the higher growth rate in May 2014 is, in part, due to the relatively low output base in May 2013 (namely, in May 2013 there was a 0.0% annual increase of GDP).

Nevertheless, various macro indicators for May show reasonable gains for the economy on the following fronts: VAT turnover and electricity consumption data, which are good proxies for economic growth, show an increase in y-o-y terms. Compared to May 2013, VAT turnover and electricity consumption for commercial entities are up by 12.2% and 2.9% respectively (see Chart 1).