GDP growth inches down in Q1

The economy lost some steam in Q1 2024, when GDP growth waned to 0.3% in a seasonally adjusted quarter-on-quarter basis. Q1’s reading came in below Q4 2023’s 0.4% increase and the 0.5% rise reported in the Q1 preliminary estimate. On an annual basis, GDP growth was stable at Q4 2023’s 0.2% in Q1. The result was a deterioration from the preliminary projection of a 0.4% annual rise.

Domestically, the moderation in quarter-on-quarter growth reflected weaker fixed investment, which fell 7.9%, deteriorating from the prior quarter’s 2.0% expansion. More positively, both public and private consumption improved. Public spending growth accelerated to 1.0% in Q1 (Q4: +0.6% s.a. qoq). Similarly, private consumption growth doubled to 1.0% in Q1 from Q4’s 0.5% rise. Turning to the external sector, exports of goods and services growth accelerated to 2.2% in seasonally adjusted quarter-on-quarter terms in Q1, marginally up from the prior period’s 2.1% increase. Additionally, imports of goods and services rebounded by 2.7% s.a. qoq in Q1 (Q4: -2.4% s.a. qoq).

Our panelists expect GDP growth to accelerate in sequential terms from Q1’s level in the coming quarters. Overall, in 2024, our Consensus is for the economy to rebound from last year’s shallow contraction. The improvement will be spearheaded by a recovery in private consumption as purchasing power is supported by lower interest rates and inflation.

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