Economy

Growth stalls in second half of 2019

  • Demand slippage: goods imports fell in both the third and fourth quarters of last year (File photograph)

Economic growth slowed in the second half of last year, government statistics reveal.

Gross domestic product contracted by 0.1 per cent in the third quarter and grew by 0.3 per cent in the fourth quarter, taking inflation into account.

The two reports by the Department of Statistics were released together yesterday.

Real GDP growth was much stronger in the first half of 2019 — 3.1 per cent in both the first and second quarters, according to the latest revisions — with gross capital formation as a result of major construction projects a significant driver.

Notable trends in the third- and fourth-quarter reports were a fall in household expenditure, a reduction in the import of goods and a dip in gross capital formation related to construction.

In the third quarter, final household income fell 0.9 per cent year-over-year to $809.2 million, while in the fourth quarter it slipped 0.5 per cent to $801 million.

Households spent less on items including clothing, furniture, motor vehicles, catering services and fuel.

However, throughout the second half of the year, households spent more on rent, electricity and insurance services.

The net surplus on trade in goods and services increased 9 per cent to $323.4 million in the third quarter and was up by 1.2 per cent to $384.4 million in the fourth quarter, mostly reflecting lower spending on goods and services.

The reports stated that goods imports fell 4.4 per cent in the third quarter with falls in imports of fuel, as well as machinery and transport equipment.

In the fourth quarter, goods imports slumped 9 per cent, with lower imports of fuel and some food items such as meat, vegetables, fruit and beverages.

Construction-related gross capital formation, defined as investment in fixed assets, fell 3.5 per cent in the third quarter and 0.4 per cent in the fourth.

Investment in machinery and equipment fell 13.4 per cent in the third quarter, but rose 4.9 per cent in the fourth quarter, when spending increased on investment in telecommunications equipment, computer and office equipment and smart electricity meters.

Exports of services edged 0.8 per cent higher during the third quarter, but slid 3.9 per cent in the fourth quarter as income from travel services, legal services, accounting services and insurance services fluctuated.

To view the GDP reports from the Department of Statistics, click on the PDF link under “Related Media”