March 1, 2019
According to comprehensive national accounts data released by the Statistical Institute on 1 March, economic growth reached 5.1% on an annual basis in the final quarter of 2018 (previously reported: +5.0% year-on-year), accelerating from the third quarter’s revised 4.5% expansion (previously reported: +4.8% yoy). For the year as a whole, annual GDP growth clocked in at 4.8% in 2018, a notch above 2017’s 4.6% expansion. Meanwhile, in seasonally-adjusted quarter-on-quarter terms, growth moderated to 1.2% in Q4 (previously reported: +1.1% quarter-on-quarter) from to 1.6% in Q3 (previously reported: +1.8% qoq).
The fourth-quarter expansion was driven by robust domestic demand. Fixed investment spearheaded the acceleration in Q4, picking up from an already impressive showing in Q3 (Q4: +18.6% yoy; Q3: +13.1% yoy). Meanwhile, household consumption remained sturdy, although it eased from the previous quarter (Q4: +3.9% yoy; Q3: +4.7% yoy), as election-related uncertainties likely weighed on consumer demand. Finally, government consumption gathered speed in the quarter, rising 4.2% year-on-year, up from 3.5% in Q3.
External sector conditions, meanwhile, were more challenging in the fourth quarter and weighed on overall growth. Exports contracted for the first time in over five years in Q4, against the backdrop of tumbling financial and construction services exports, falling 2.0% in Q4, compared to the marginal 0.5% increase observed in Q3. Nevertheless, thanks to a stronger deterioration in imports growth (Q4: +2.1% yoy; Q3: +5.8% yoy), the external sector’s contribution to growth improved from minus 3.7 percentage points in Q3 to minus 2.8 percentage points in Q4.
Author: Almanas Stanapedis, Economist