GDP DATA FOR Q2 and H1 2016 — first estimate, 16th August

August 17, 2016

Bottom line: Back in the groove!

What a difference three months makes — and how valid is the ‘health warning’ that the Central Bureau of Statistics adds to its GDP analyses, noting that the quarterly data are volatile! The annualised rate of GDP growth in the second quarter was 3.7% — on this first estimate — and that for the first quarter was revised upward for the third time in succession, to 2.2%, so that the rate for the first half was 2.9%, higher than either half of 2015.

  • Business sector GDP was a much-healthier 3.3% in Q2, but still only 1.0% in Q1, so a disappointing 2.2% for H1.
  • The main driver of growth is consumption — mainly, but no longer only, private consumption — which rose at a 9.5% annual clip in Q2 and 7.3% for H1.
  • Government consumption rebounded, to an 8.7% annualised rate of expansion in Q2, after a negative 1.8% in Q1; for the first half, the rise was 3.8%.
  • Consumption of durable goods posted another huge jump, of 33.2% annualised, in Q2, with vehicle imports the dominant focus.
  • Investment was a weak spot in this report, posting a 4.1% rise in Q2, after 17.4% in Q1. The rush to buy cars and trucks is fading — and residential construction growth has also turned sluggish.
  • But the external sector was the main drag on GDP growth. Export growth, which was revised up to 6.6% for Q1 — after having previously been estimated as falling — was only 3.8% in Q2.
  • Meanwhile, imports soared at a 22.4% annualised pace in Q2, compared to only 2.9% in Q1 — vehicle imports were important contributors, but the increase was across the board.
  • For the first half of 2016, exports rose at a 4.9% pace, while imports gained 11.7%.
  • But the initial estimate for exports is likely to be revised higher, in light of more recent data for June.

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