GDP records sharpest contraction in a year in Q3

GDP reading: The economy contracted 0.3% on a seasonally adjusted quarter-on-quarter basis in the third quarter, largely erasing the gains from the second quarter's 0.3% increase and marking worst result in a year. On an annual basis, economic growth was stable at Q2’s 0.3% in the three months to September.

Drivers: The quarterly downturn was largely due to a deterioration in public spending and exports. Domestically, government consumption dropped 0.5% (Q2: +0.9% s.a. qoq). Moreover, private consumption growth—which accounts for roughly two-thirds of GDP—more than halved to 0.5% in the third quarter, which was below the second quarter's 1.2% expansion. More positively, fixed investment bounced back, growing 0.3% in Q3, contrasting the 1.2% decrease logged in the previous quarter. Turning to the external front, exports of goods and services contracted 3.7% in Q3 (Q2: -0.7% s.a. qoq), marking the worst reading since Q3 2021. Meanwhile, imports of goods and services also deteriorated, contracting 3.9% in Q3 (Q2: +1.7% s.a. qoq).

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