GDP growth records fastest upturn in a year in Q1

Year-on-year GDP growth picked up to 4.2% in the first quarter, up from 2.9% in the fourth quarter of last year. Q1's reading marked the best result in a year, exceeding both the preliminary estimate of 3.9% and market expectations. The upturn reflected a broad-based improvement in activity. On a seasonally adjusted quarter-on-quarter basis, economic activity rebounded, expanding 1.4% in Q1 and contrasting the previous period's 1.0% decrease.

Looking at the details of the release, private consumption growth picked up to 4.7% year on year in Q1 compared to a 4.2% expansion in Q4. Government consumption growth hit an 11-quarter high of 7.3% in the first quarter, up from the fourth quarter's 5.8%. Meanwhile, fixed investment growth accelerated to 9.6% in Q1 from the 6.4% expansion in the previous quarter. Exports of goods and services bounced back, growing 5.2% year on year in the first quarter, which marked the best reading since Q4 2022 (Q4 2023: -7.9% yoy). Meanwhile, imports of goods and services bounced back, growing 8.0% in Q1 (Q4 2023: -2.6% yoy).

EIU analysts commented on the outlook: “We maintain our projection of 4.4% annual real GDP growth in 2024. Key drivers such as consumer spending, investment and export activity are poised to remain supported in the second half of the year. Furthermore, relatively accommodative monetary policy and ongoing fiscal stimulus measures are likely to provide additional impetus.”

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