GDP growth slows slightly in Q2

GDP reading: GDP growth ebbed to 0.6% on a seasonally adjusted quarter-on-quarter basis in Q2 from 0.7% in the first quarter. The moderation was largely due to a rebound in imports which softened the contribution of the external sector to growth. On an annual basis, economic activity bounced back, increasing 0.4% in Q2, contrasting the previous quarter's 0.2% decrease and marking the best result since Q3 2022.

Drivers: Household spending growth rebounded, growing 1.3% in seasonally adjusted quarter-on-quarter terms in Q2 compared to a 0.6% decline in Q1. Investment also bounced back, growing 1.4% in Q2 and contrasting the 4.2% fall recorded in the previous quarter. Moreover, public spending growth accelerated to 1.7% in Q2 (Q1: +0.9% s.a. qoq). On the external front, exports of goods and services growth hit an over two-year high of 1.4% in the second quarter (Q1: -0.5% s.a. qoq). In addition, imports of goods and services grew 1.0% in Q2 (Q1: -1.3% s.a. qoq), marking the highest rate in over two years.

Panelist insight: Analysts at the EIU commented on the outlook: “Growth in 2024 will largely be driven by the country's dominant financial services sector, which will rebound this year in line with the global and European economy. Growth will also be driven by slowing inflation (which will strengthen household spending), loosening monetary policy from the second half of the year and a rebound in export growth.”

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