GDP growth records best result since Q1 2023 in Q2

GDP reading: GDP growth picked up to 0.5% year on year in the second quarter, from 0.1% in the first quarter and marking the fastest growth since Q1 2023. On a seasonally adjusted quarter-on-quarter basis, GDP dropped 0.9% in Q2, contrasting the previous quarter's 0.8% growth and marking the sharpest downturn since Q2 2020.

Drivers: Domestically, government consumption was the chief driver of the improvement, rising 8.5% in Q2 (Q1: +8.2% yoy). In addition, fixed investment dropped at a more moderate pace of 5.7% in Q2, following the 9.3% decrease in the previous quarter. Less positively, private consumption increased 0.5% in the second quarter, which was below the first quarter's 0.7% expansion. On the external front, exports of goods and services fell 3.4% on an annual basis in the second quarter, which was below the first quarter's 3.0% contraction. Conversely, imports of goods and services dropped at a more moderate rate of 2.9% in Q2 (Q1: -6.4% yoy).

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