Greece: GDP growth records best result in one-and-a-half years in Q2
GDP growth picked up to 1.1% on a seasonally adjusted quarter-on-quarter basis in the second quarter from 0.8% in the first quarter, marking the best result since Q4 2022. On an annual basis, economic growth edged up to 2.3% in Q2, following the previous period’s 2.1% expansion and marking the strongest increase since Q2 2023.
The quarterly improvement was driven by stronger momentum in both private and public spending as well as exports. Private consumption growth picked up to 0.6% seasonally adjusted quarter-on-quarter in Q2 from a 0.2% expansion in Q1, aided by a tighter labor market and softer price pressures. Government spending rebounded, growing 0.7% in Q2 (Q1: -3.4% s.a. qoq). Nonetheless, fixed investment growth plummeted to 0.8% in Q2 from 7.2% in the prior quarter.
On the external front, exports of goods and services bounced back, growing 2.5% seasonally adjusted quarter on quarter in the second quarter (Q1: -1.0% s.a. qoq), which marked the best reading since Q1 2023. That said, imports of goods and services rebounded, growing 6.1% in Q2 (Q1: -0.5% s.a. qoq), marking the strongest reading since Q3 2021.
Our Consensus is for the economy to lose some steam in H2, a prediction supported by softer economic sentiment and PMI manufacturing data for July–August compared to Q2. Nonetheless, the economy is set to continue outperforming the Euro area, supported by healthy private spending and the disbursement of EU funds.