Translated using ChatGPT service.
According to data from the Central Statistical Bureau, in the second quarter of this year, GDP at constant prices was 0.5% higher than a year ago. In comparison, GDP had declined in the last three quarters of 2023 but grew by 0.1% in the first quarter of this year. Given the still tense geopolitical situation, the modest increase in GDP in the second quarter of this year is viewed positively, indicating that the economic situation is gradually starting to improve.
Price growth is moderating, with wage increases outpacing inflation, strengthening household purchasing power. Household consumption continues to rise, with private consumption in the second quarter being 0.5% higher than a year ago.
Public consumption continues to grow, increasing by 8.5% year-on-year in the second quarter.
While the decline in investments continued, it was more moderate than in the first quarter. Gross fixed capital formation decreased by 5.7% year-on-year. Investments in housing, buildings, and structures fell by 1.5%, and investments in machinery and equipment, including transportation, decreased by 9.5%. Investments in intellectual property products dropped by 8.8%.
Exports of goods and services continue to be affected by unfavorable conditions in external markets. In the second quarter, exports were 3.4% lower than a year ago, with a larger decline in service exports (-6%). Goods exports decreased by 2.4% in the second quarter. The main export products were wood and wood products, mineral products, electrical devices, and equipment. Imports were also lower in the second quarter compared to the previous year, with a 2.9% decline.
In terms of sectors, the overall value added in the second quarter decreased by 0.1% compared to the second quarter of last year. Service sectors saw growth of 0.5%, while the manufacturing sectors experienced a decline of 1.4%. In contrast to the first quarter, several private sector industries showed growth in the second quarter, including information and communication services, professional, scientific, and technical services, as well as accommodation and food services.
The pace of decline is also slowing in manufacturing. The reduction in manufacturing was primarily driven by decreases in wood processing (-0.8%), metal product manufacturing (-7%), and the production of electronic and optical equipment (-11.2%). Positive trends were observed in food production (+2%), chemical product manufacturing (+12.2%), and non-metallic mineral product manufacturing (+5.1%). In the construction sector, following rapid growth in 2023, production volumes declined by 1.5% in the second quarter of this year.
Overall, service sector production volumes increased by 0.5% in the second quarter of this year compared to the second quarter of 2023. Growth was observed in the ICT sector (+5.6%), education (+6.7%), health and social care (+6.5%), as well as retail trade, including non-food retail (+1.2%) and sales of motor fuels (+3.8%).
It is expected that geopolitical uncertainty and weak external demand will continue to affect economic development. However, growth rates are likely to increase in the second half of the year. The Ministry of Economics forecasts that GDP could grow by around 1% in 2024.