NBG | Economic Analysis Department Greece Macro Analysis Team 86 Eolou Str., 105 59 Athens, Greece GREECE Macro Flash GDP Q3:2018 December 2018 NATIONAL BANK OF GREECE Economic activity gained traction in Q3:2018, with the breakdown in GDP growth more encouraging than primary data suggest Nikos S. Magginas PhD Head of Economic Analysis (+30210) 334 1516 e-mail: [email protected]Effrosyni Alevizopoulou PhD (+30210) 334 1620 e-mail: [email protected]Aikaterini Gouveli MSc (+30210) 334 2359 e-mail: [email protected]Eleni Balikou MSc (+30210) 334 1198 e-mail: [email protected]Greek GDP data for Q3:2018 confirm that economic activity is on an upward trend. Indeed, GDP grew by 2.2% y-o-y from 1.7% in Q2:2018, and by 1.0% q-o-q (seasonally adjusted data), the strongest pace since Q2:2017 A cursory look at the structure of GDP surprises at first, as the build- up of inventories appears to contribute 8.3 pps in Q3:2018 annual growth, while gross fixed capital formation has fallen sharply by 23.2% y-o-y However, a closer look at the data suggests that both the overly positive contribution of inventories and the collapse of investment, in Q3:2018, are mainly due to a statistical adjustment in Q3:2017 that creates a sizeable base effect. This adjustment, which affects the third quarter of 2017, stems from the inclusion in investment expenditure for non-residential construction of completed projects carried out by means of concession agreements, which prior to completion, were recorded under inventories If we adjust the data and thereby correct the impact of this reclassification, we see that gross fixed capital formation shows growth of 25.1% y-o-y in Q3:2018 in comparison to a decrease of 23.2% y-o-y for the primary data The positive underlying trends in investment outlined above, as well as domestic spending overall, are likely to strengthen further in Q4:2018, supported by the substantial acceleration in disbursements by the Public Investment Budget In light of the foregoing analysis and available data for forward- looking and coincident economic indicators for Q4:2018, it appears increasingly likely that the annual GDP growth target of 2.0% for FY:2018 will be outpaced -30 -20 -10 0 10 20 30 40 -30 -20 -10 0 10 20 30 40 Q4:2014 Q1:2015 Q2:2015 Q3:2015 Q4:2015 Q1:2016 Q2:2016 Q3:2016 Q4:2016 Q1:2017 Q2:2017 Q3:2017 Q4:2017 Q1:2018 Q2:2018 Q3:2018 Other investment (in pps) Transport equipment (in pps) Machinery & technology equipment (in pps) Residential construction (in pps) Non-residential construction (in pps) Total GFCF (y-o-y) Total GFCF (Q3:2018 unadjusted data, y-o-y) contribution in pps y-o-y Contribution in annual change in GFCF by component (incl. a reclassification andjustment by NBG Econ. Analysis Division and total GFCF with & without adjustment) Macro Indicators on pages 4-5
6
Embed
GREECE NATIONAL BANK OF GREECE Greece: Macro Flash Macro … · Economic activity gained traction in Q3:2018, with the breakdown in GDP growth, more encouraging than primary data
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Greek GDP data for Q3:2018 confirm that economic activity is on an upward trend. Indeed, GDP grew by 2.2% y-o-y from 1.7% in Q2:2018, and by 1.0% q-o-q (seasonally adjusted data), the strongest pace since Q2:2017
A cursory look at the structure of GDP surprises at first, as the build-up of inventories appears to contribute 8.3 pps in Q3:2018 annual growth, while gross fixed capital formation has fallen sharply by 23.2% y-o-y
However, a closer look at the data suggests that both the overly positive contribution of inventories and the collapse of investment, in Q3:2018, are mainly due to a statistical adjustment in Q3:2017 that creates a sizeable base effect. This adjustment, which affects the third quarter of 2017, stems from the inclusion in investment expenditure for non-residential construction of completed projects carried out by means of concession agreements, which prior to completion, were recorded under inventories
If we adjust the data and thereby correct the impact of this reclassification, we see that gross fixed capital formation shows growth of 25.1% y-o-y in Q3:2018 in comparison to a decrease of 23.2% y-o-y for the primary data
The positive underlying trends in investment outlined above, as well as domestic spending overall, are likely to strengthen further in Q4:2018, supported by the substantial acceleration in disbursements by the Public Investment Budget
In light of the foregoing analysis and available data for forward-looking and coincident economic indicators for Q4:2018, it appears increasingly likely that the annual GDP growth target of 2.0% for FY:2018 will be outpaced
-30
-20
-10
0
10
20
30
40
-30
-20
-10
0
10
20
30
40
Q4
:20
14
Q1
:20
15
Q2
:20
15
Q3
:20
15
Q4
:20
15
Q1
:20
16
Q2
:20
16
Q3
:20
16
Q4
:20
16
Q1
:20
17
Q2
:20
17
Q3
:20
17
Q4
:20
17
Q1
:20
18
Q2
:20
18
Q3
:20
18
Other investment (in pps) Transport equipment (in pps)
Machinery & technology equipment (in pps) Residential construction (in pps)
Non-residential construction (in pps) Total GFCF (y-o-y)
Total GFCF (Q3:2018 unadjusted data, y-o-y)
contribution in pps
y-o-y
Contribution in annual change in GFCF by component (incl. a reclassification andjustment by NBG Econ. Analysis Division and total GFCF with & without adjustment)
Real economy (y-o-y period average, constant prices)
Coincident and leading indicators (period average)
External sector (period average)
Employment
Prices (y-o-y period average)
NATIONAL BANK OF GREECE | Greece: Macro Flash
GREECE | NBG Macro Flash |December 2018| p. 6
NATIONAL BANK OF GREECE
Main contributors (in alphabetical order): E. Alevizopoulou, E. Balikou, A. Gouveli, N. Magginas, G. Murphy, P. Nikolitsa.
This report has been produced by the Economic Analysis Division of the National Bank of Greece, which is regulated by the Bank of Greece and is provided solely for the information of professional investors who are expected to make their own investment decisions without undue reliance on its contents, effecting their own independent enquiry from sources of the investors’ sole choice. The information contained in this report does not constitute the provision of investment advice and under no circumstances is it to be used or considered as an offer or an invitation to buy or sell or a solicitation of an offer or invitation to buy or sell or enter into any agreement with respect to any financial asset, service or investment. Any data provided in this bulletin has been obtained from sources believed to be reliable but have not been independently verified. Because of the possibility of error on the part of such sources, National Bank of Greece and/or its affiliates does not guarantee the accuracy, timeliness or usefulness of any information. The National Bank of Greece and its affiliate companies accept no liability for any direct or consequential loss arising from any use of this report. The final investment decision must be made by the investor and the responsibility for the investment must be taken by the investor. This report is not directed to, nor intended for distribution to use or use by, any person or entity that is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to any law, regulation or rule. The report is protected under intellectual property laws and may not be altered, reproduced or redistributed, to any other party, in whole or in part, without the prior written consent of National Bank of Greece.
The analysis is based on data up to December 5, 2018, unless otherwise indicated