Macro and Politics

* The CBT will release the April Real Sector Confidence Index and Capacity Utilization Rate @ 10:00 local time today. The Real Sector Confidence Index (RSCI) further improved to 104.1, which stands for the highest level since May, up from 102.4 in March, while the seasonally adjusted RSCI increased from 102.8 to 103.2. Additionally, the Capacity Utilization Rate (CUR) showed a modest change, with the unadjusted CUR edging down from 74.5% to 74.4%, while the adjusted CUR increased to 75.2% from 74.9% in March. Leading indicators that signaled a recovery in activity for February pointed to a solid pace in March, albeit with a slight deceleration compared to the previous month. We will be closely monitoring the impact of recent domestic developments—beginning in the final weeks of March—on the confidence indices for April. While our GDP growth forecast for 2025 remains at 3.1%, we assess that downside risks to this projection are increasing. In light of the latest domestic dynamics and tightening financial conditions, we believe the likelihood of growth falling below the 3% threshold in 2025 has risen.

* The CBT will release weekly international reserves for the period of April 11 – 18 @ 14:30 local time. Based on our calculations upon the CBT’s analytical balance sheet, we estimate that during the week of April 11 – 18, the net international reserves increased by a mere USD16mn to USD39bn and the gross FX reserves slid by USD644mn to USD147bn. We anticipate that today’s official reserve data will likely reflect a similar trend in line with our calculations. Please note that the weekly foreign portfolio flows and money & banking statistics, typically released alongside the reserves data, will be published tomorrow due to the public holiday.

* The consumer confidence index declined by 2.3% from 85.9 to 83.9 level in April. Please recall that the index climbed from 82.1 to 85.9 level back in March, rising to its highest level since May 2023. However, recent domestic developments since March 19 and increased market volatility have begun to impact leading indicators as of April. As per the sub-categories of the April data: The index related to the financial situation of households at present decreased from 70.9 to 69.1, while the general economic situation expectation index over the next 12 months period decreased by 2.2% to 82.8. Moreover, the financial situation expectations of households over the next 12 months index retreated by 0.5% to 84.3, while the sub-index related to the assessment on spending money on durable goods over the next 12 months compared to the past 12 months period, which is an important leading indicator in terms of domestic demand, slid 3.8% m/m to 99.3.