Greece Macro Flash: GDP Q2:2017

​GDP growth gains traction in Q2:2017

• Greek GDP growth accelerated to +0.8%, y-o-y in Q2:2017 from +0.4%, y-o-y in Q1:2017, maintaining its strong momentum, on a quarterly basis, of +0.5% (s.a. q-o-q) in both Q1:2017 and Q2:2017.
• The most impressive component of the Q2 results was the solid development in exports of goods and services, which were the main driver of GDP in Q2:2017. Net export growth contributed +1.8 pps to annual GDP growth in this quarter -- the highest contribution in 2 years -- from -2.2 pps in Q1:2017 and -0.7 pps, on average, in FY:2016.
• Private consumption was unexceptional, increasing by +0.7% y-o-y (lower than the Q1:2017 growth of 1.2% y-o-y). However, public consumption was quite strong (+3.3% y-o-y) in Q2:2017 -- partly related to the progress towards the completion of the 2nd review of the economic support programme in Q2, following an over-restraint in spending in Q1:2017.  
• The main disappointment is the decline in gross fixed capital formation (by 4.6% y-o-y). The contraction mainly reflected lower non-residential construction (-9.3% y-o-y, partly related to a decline in public investment program disbursements of 24.9% y-o-y or -1.2% of GDP in Q2:2017) and negative base effects on investment in transportation equipment (-5.5% y-o-y) in comparison to a sharp upswing in spending in Q2:2016 (+122% y-o-y in Q2:2016 related to higher payments for merchant ships). Stripping out the effect of shipping, private sector non-residential investment fell by 3.5% y-o-y in Q2:2017, mostly due to public investment.