Lending growth slowed for the third consecutive month to 3.1% yoy, the lowest in 16 months. The weak credit demand despite abundant interbank liquidity suggests domestic investments continued to decelerate.



Against the backdrop of falling external demand and investments, IP is expected to remain weak. A negative base effect will probably drag IP growth down to zero in May from 1.06% yoy in April.



"Meanwhile, commercial sales are expected to have decelerated further to -3% yoy in May from -2% yoy, mainly driven down by wholesales as economic momentum weakened", says Socgen.