GDP growth moderated to 1.6% y/y in 3Q08
3Q GDP data showed expected moderation of economic activity posting 1.6% y/y growth , thus being slightly below our expectations (ESBe: 1.8% y/y) and presenting lowest figure since 4Q00. More detailed look at the numbers offers relatively little surprise. As monthly frequency indicators were suggesting private consumption growth decelerated significantly (+0.4% y/y vs. 2.2% y/y in 2Q) affected by peaking inflation pressures in 3Q, unfavorable real wages performance, deteriorating consumer confidence and moderating credit growth. On the other hand fixed capital formation pacing at 6.6% y/y remained growth supportive, though being slightly below our expectations given still strong construction sector activity and also solid capital goods imports dynamics. Public consumption also moderated significantly growing 1.3% y/y in 3Q vs. 3.2% y/y in 2Q. On the other hand inventories changes supported GDP performance contributing roughly 2pp to the overall GDP figure. Net exports contribution expectedly remained negative (-2.7pp) given only moderated growth on the exports side (+1.7% y/y) and ongoing pressures on the imports (+6.3% y/y) side as suggested by monthly trade balance figures. Economic performance is expected to further slowdown in 4Q given the continuation of rather poor private consumption trends, moderation of investment activity and unfavorable international developments affecting external demand. Therefore we see FY08 GDP growth rate moderating towards 2.5-3% region.
