Q1 GDP growth revised up in June

GDP reading: In a second release, annual GDP growth in Q1 was revised up to 3.4% (preliminary reading: +2.7% yoy), while remaining below the 4.4% expansion seen in the fourth quarter of last year. On a seasonally adjusted quarter-on-quarter basis, economic growth improved moderately to 1.1% in Q1 (preliminary reading: +0.9% qoq s.a.), following the previous quarter's 0.9% growth and marking the strongest expansion since Q1 2024.

Drivers: Household spending increased 4.5% in the first quarter, which was above the fourth quarter's 3.6% expansion. Public consumption rebounded, growing 5.2% in Q1 (Q4 2024: -6.9% yoy). Meanwhile, fixed investment rebounded, growing 8.5% in Q1, following the 4.2% contraction logged in the prior quarter. Exports of goods and services growth fell to 1.5% in Q1, marking the worst reading since Q2 2024 (Q4 2024: +5.3% yoy). Meanwhile, imports of goods and services growth moderated to 2.7% in Q1 (Q4 2024: +10.5% yoy).

Panelist insight: EIU analysts said: “Economic growth over the next two years will benefit from a gradual phasing out of voluntary constraints on oil production, as agreed with Saudi Arabia’s OPEC+ partners. Growth over the forecast period (2025-29) as a whole will also be driven by a rising contribution from non-oil sectors, such as tourism, manufacturing and mining.”

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