Real GDP growth surged to +2% q/q and +6% y/y in Q4 2017, taking the full-year 2017 expansion to +5%, a marked acceleration from +3.1% in 2016. Growth in 2017 was broad-based, though investment and exports were outstanding drivers. Consumer spending expanded by +3.2% in 2017 (+3.3% y/y in Q4) and government spend¬ing by +2.3% (+5.6% y/y in Q4). Fixed investment rebounded from a -3.6% decline in 2016 to a +10.3% increase in 2017 (+11.9% y/y in Q4). Investment in machinery and equipment rose by +8.2% y/y in Q4 while construction investment surged by +18.2% y/y. External trade activity gained strong momentum in 2017, with exports rising by +10.6% (+12.3% y/y in Q4) and imports by +10.1% (+11.1% y/y in Q4), so that net exports contributed +1.3pp to full-year growth. Business sentiment has remained favorable in early 2018 but fixed investment growth should ease from its peak in 2017 due to base effects. We forecast full-year GDP growth of +4% in 2018.
