Real GDP rose by +1.7% in 2017, the highest since 2011. We expect growth to edge up to +1.8% in 2018. Private consumption should exit the soft mood (+1.4% in 2018, after +1.1% in 2017) as the one-off negative effects from the rise in taxes and the subsequent increase in inflation (+2.1% in 2017) will wane. Household real purchasing power in 2018 should be supported by higher wage growth (slightly above +2%) and lower inflation (+1.6%). Export gains reached EUR21bn in 2017, the highest since 2011. We expect export gains to rise further to EUR25bn in 2018 as strong global export growth will support higher volumes and companies’ pricing power should continue to improve. After four consecu¬tive years of contraction, manufacturing turnover growth registered a strong +9.9% in 2017, partly driven by the rise in oil prices. NFC’ margins continued to strengthen in 2017 to 43.4% of the value added at end-2017, 2pp above the Eurozone average and the highest level since 2000. This coupled with the positive demand perspectives and low corporate debt should continue to support business investment growth in 2018 (forecast at +2.1%).
