Q4 real GDP growth figures came in higher than expectations, at +3.9% y/y (non-seasonally adjusted). In seasonally adjusted terms, the economy grew by +1% q/q, accelerating from +0.8% in Q3 and +0.6% in Q2. Revisions of previous quarters’ figures lead to full-year growth of +2.9% in 2017, in line with our forecast. Domestic demand was the main growth driver in Q4, with private consumption rising for the third straight quarter (+4.8% y/y) and investment soaring by +20.7% y/y. Yet, the positive 2017 picture is balanced by a poor export performance: overall in 2017 net exports subtracted -3.8pp from GDP growth as imports rose by +14.7% while exports lagged behind at just +0.4%. That should have widened the 2017 current account deficit, also because investment grew faster than national savings. This pushes for further fiscal consolidation to boost public savings and alleviate pressure on external accounts, amid continued ARS depreciation to improve competitiveness.
