Real GDP growth accelerated to +3.8% y/y in Q2 2018 from +3.1% y/y in Q1. Fixed investment was the main growth driver in Q2, rising by +14.2% y/y (though this was down from +17% in Q1). A surprisingly strong rebound in public spending growth to +11% y/y (from -1.4% in Q1) also contributed significantly to the performance in Q2. Household spending slowed down to +4.2% y/y in Q2 from +5.6% y/y in Q1. A closer look shows that consumers increased their spending the most on furnishing and household maintenance (+12.6% y/y), health (+10.1%), clothing (+6.3%) and energy and utilities (+6% y/y) in Q2. In contrast, spending on communication (+1.1% y/y) and on transport (+3.4%) increased more moderately, while spending on education shrank by -5.5%. External trade activity recovered somewhat from the weakening in Q1, with exports up by +0.1% y/y (after contracting by -9.9% y/y in Q1) and imports up by +3% (-5.4% in Q1). We forecast full-year GDP growth of +3.4% in 2018.
