Serbia: Q2 GDP growth revised down
GDP reading: GDP growth waned to 4.0% year on year in the second quarter from 4.6% in the first quarter. The print came in slightly below the flash estimate of 4.2%.
On a seasonally adjusted quarter-on-quarter basis, economic growth gained steam, accelerating to 0.8% in Q2, compared to the previous quarter’s 0.7% increase.
Drivers: The external sector was the sole culprit behind the annual deceleration; although exports of goods and services growth hit an over one-year high of 4.4% (Q1: +1.3% yoy), imports of goods and services growth picked up to a near two-year high of 8.5% (Q1: +3.5% yoy), meaning the external sector detracted from the overall reading.
On the domestic front, the economy fired on all cylinders. Private consumption growth hit an over two-year high of 4.8% (Q1: +4.4% yoy). Public consumption rose at a faster rate of 4.5% (Q1: +3.6% yoy). Meanwhile, fixed investment growth hit an over two-year high of 8.5% (Q1: +7.5% yoy).
GDP outlook: Our Consensus is for the economy to lose some steam in H2. That said, early data suggests upside risks to this projection: Economic sentiment remained elevated in Q3, supported by upbeat confidence in the industrial and services sectors. In addition, ongoing monetary policy easing should provide a boost towards the end of the year.