Bulgaria: GDP growth ticks up in Q1 on investment-driven gains
June 7, 2018
Comprehensive data released by the Statistical Institute puts growth in the first quarter at 3.6% year-on-year, a notch above both the preliminary estimate and growth in the fourth quarter last year. Despite still coming in below analysts’ expectations, growth in the first quarter was upgraded since its initial release on improved consumption dynamics and a sharply weaker increase in imports. All told, the broad-based expansion suggested a mature stage for the economy along the current business cycle.
Growth in total consumption was upgraded to 3.3% on an annual basis in the first quarter (previously reported: +2.4% year-on-year; Q4 2017: +3.8% yoy). Household spending lost steam in the quarter but remained upbeat, growing 2.9% as employment gains slowed (Q4 2017: +3.6% yoy). For its part, government spending grew 1.7%, in line with the fourth quarter last year. Fixed investment, meanwhile, recorded strong gains in the first quarter despite a minor downgrade from the preliminary estimate, expanding 7.0% (previously reported: +7.2% yoy; Q4 2017: 4.5% yoy) on heavy inflows of EU-linked capital spending; it was further supported by buoyant business sentiment in the quarter.
In the external sector, growth was more balanced in the first quarter. Exports of goods and services grew 4.4% on an annual basis, a slight downgrade but nevertheless robust (previously reported: +4.6% yoy: Q4 2017: 2.0% yoy), in the face of waning demand from the European Union. Imports of goods and services, on the other hand, were revised sharply since the initial release, growing a more modest 4.6% in the quarter (previously reported: +6.8% yoy; Q4 2017: +8.3% yoy). Taken together, the external sector contributed negligibly to headline growth in the first quarter—a notable improvement from its significant drag on the economy in the fourth quarter last year.
On a quarter-on-quarter basis, growth ticked up to 0.9% in seasonally-adjusted terms (Q4 2017: +0.7% quarter-on-quarter).
Author: Christopher Thomas, Economist