Serbia: Upwardly-revised Q1 GDP print still weak despite robust private consumption growth
June 1, 2017
GDP expanded 1.2% year-on-year in Q1, according to revised data published by the Statistical Office (SORS) on 1 June. This was an upgrade to the flash estimate of 1.0% released on 4 May but still a considerable deceleration from Q4 2016’s 2.5% print and the weakest growth since Q4 2015. Sequential data confirmed the sluggishness, with growth at 0.1% quarter-on-quarter, below Q4 2016’s 0.3% print.
The report showed that government consumption decelerated considerably to 0.5% in Q1 (Q4: +2.3% yoy). Likewise, fixed investment growth slowed to an over two-year low of 1.3% (Q4: +2.6% yoy). On the upside, private consumption growth picked up for another quarter and accelerated to 1.9% (Q4: +1.0% yoy), the strongest reading in six years.
On the external side, growth in exports of goods and services fell to single digits (Q1: +8.7% yoy; Q4 2016: +13.8% yoy) following four quarters of double-digit growth, although the result was still strong. Imports, on the other hand, climbed to 10.9% (Q4: +5.9% yoy), the highest reading since Q2 2016. As a result, the external sector’s contribution to GDP growth in Q1 was minus 2.4 percentage points, the sector’s most negative contribution to overall growth since Q3 2014.
Author: Christopher Thomas, Economist