Economy grows at softest pace since Q2 2024 in Q2

Sequential growth softens in Q2: Economic growth halved in the second quarter, with GDP expanding 0.4% on a seasonally adjusted quarter-on-quarter basis (Q1: +0.8% s.a. qoq), the softest expansion in a year. On an annual basis, economic growth accelerated to 3.1% in Q2, compared to the previous quarter's 2.5% expansion.

Most sectors moderated: Looking at the details of the release, the quarterly slowdown was driven by deteriorations in private and public consumption plus exports. On the domestic front, private consumption growth eased to 0.9% in the second quarter, down from the first quarter's 1.1% expansion, while public spending swung into contraction in Q2, falling 2.0% (Q1: +8.9% s.a. qoq). Meanwhile, fixed investment growth improved to 4.0% in Q2, following the 0.2% increase logged in the previous quarter. On the external front, exports of goods and services contracted 1.3% in Q2 (Q1: +2.5% s.a. qoq), marking the worst reading in two years. Conversely, imports of goods and services growth picked up to 4.8% in Q2 (Q1: +1.8% s.a. qoq).

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