OECD GDP growth slows to 0.3 % in the second quarter of 2016 on the back of destocking

OECD GDP growth slows to 0.3 % in the second quarter of 2016 on the back of destocking

Real GDP growth in the OECD area slowed slightly to 0.3 % in the second quarter of 2016, compared with 0.4 % in the previous quarter. Contributions from private and government consumption remained steady, at 0.3 and 0.1 percentage point respectively, while destocking pulled GDP growth down by 0.2 percentage point (down from minus 0.1 in the previous quarter), partially counterbalanced by a pick-up  in the contribution from investment (to 0.1 percentage point). The contribution from net exports remained negligible                  

OECD GDP

OECD GDP 2

Despite the small change in OECD totals, GDP growth, and the contribution of components, varied significantly across countries.

In the United Kingdom, prior to the 23 June referendum, GDP growth accelerated  to 0.7 % (compared to 0.4 % in the previous quarter), as the contribution from investment picked up to 0.3 percentage point with stockbuilding adding a further 0.6 percentage point (compared with minus 0.4 percentage point in the previous quarter).  Offsetting, and partly reflecting, these contributions, was a strongly deteriorating trade balance that contributed minus 0.8 percentage point. 

In the United States, GDP growth picked up to 0.4 % (from 0.2 % in the previous quarter), as the contribution from private consumption increased to 0.7 percentage point (compared with 0.3 percentage point in the previous quarter) which was only partially offset by destocking (minus 0.3 percentage point, compared with minus 0.1 percentage point in the previous quarter).

GDP slowed to 0.4 % (down from 0.7 %) in Germany, as contributions from private and government consumption slowed, whereas investment contracted (contributing minus 0.3 percentage point to GDP growth). Net exports picked up strongly however (contributing 0.6 percentage point, compared with 0.3 percentage point in the previous quarter). 

GDP growth also slowed in Japan (to 0.2 %, down from 0.5 %), as a result of a deteriorating trade balance (contributing minus 0.3 percentage point, compared with 0.1 percentage point in the previous quarter) and declining contributions from private consumption (0.1, from 0.4) and government consumption (0.0, from 0.2). These effects were only partially offset by a recovery in the contribution from investment, which contributed 0.2 percentage point, following a contraction in the previous quarter.

In Italy, GDP was unchanged in the second quarter, as the contribution from net exports, which rebounded strongly to 0.3 percentage point (up from minus 0.2 percentage point in the previous quarter), was offset by destocking (minus 0.3, from 0.2) and a slowdown in private consumption (0.0, from 0.2) and investment (0.0, from 0.1).

GDP contracted slightly in France (by 0.1 %), as private consumption slowed sharply (contributing 0.0 percentage point to GDP growth, compared with 0.6 percentage point in the previous quarter). The contribution from investment also slowed (to 0.0, from 0.3).  The significant improvement in the contribution of the trade balance (0.6 percentage point, compared with minus 0.2 percentage point in the previous quarter) was largely offset by destocking.

GDP also fell in Canada (minus 0.4 %, down from 0.6 %), as the contribution of net exports slowed dramatically (to minus 1.5 percentage point, compared with 0.5 percentage point in the previous quarter). This negative effect was partially offset by positive contributions from stock building (0.5, from minus 0.2) and government consumption (0.2, from 0.1).

OECD GDP 3

 

www.oecd.org


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