According to a preliminary estimate, GDP rose 1.1% on a seasonally-adjusted quarter-on-quarter basis in Q2, accelerating notably from the 0.2% uptick recorded in Q1. The economy surprised markets on the upside and benefited from the removal of most remaining Covid-19 restrictions and a strong Easter holiday season for tourism. In year-on-year terms, the economy grew 6.3% in Q2, which was unchanged from the previous quarter.
A notable rebound in consumer spending drove the quarterly acceleration: Private spending rose 3.2% on a quarterly basis, following a 2.0% contraction in Q1, despite soaring energy prices, benefiting from a tightening labor market and accumulated savings. Meanwhile, fixed investment rose 2.8%, supported by growth in investment in tangible fixed assets and housing (Q1: +3.4% s.a. qoq), while government consumption decreased 0.5% from the prior quarter (Q1: +0.1% s.a. qoq).
Meanwhile, the external sector weighed on the economy, as exports growth was outpaced by the increase in imports: Exports of goods and services rose 1.6% in seasonally-adjusted quarter-on-quarter terms (Q1: +.1.% s.a. qoq), while imports were up 4.6% in quarterly terms (Q1: -0.8% s.a. qoq).
FocusEconomics Consensus Forecast panelists project that GDP will expand 5.0% in 2022, which is down 0.6 percentage points from last month’s forecast, and 3.5% in 2023.