Headline real GDP growth reportedly accelerated to 4.8% y/y in Q1 from 4.0% in Q4 last year. However, given the deepening slowdown in the property sector and COVID-related restrictions on activity, there are few plausible explanations for faster economic growth early this year. Lockdowns will exact a rising economic cost in the months ahead, while credit growth and credit demand remain tepid, reducing financing available for new investment. Caution in monetary easing raises the need for additional fiscal policy support, which may require a rare mid-year budget revision.
