OECD GDP growth continues steadily in the fourth quarter of 2021, but slows in Europe

Gross domestic product (GDP) in the OECD area rose by 1.2% between the third and fourth quarter of 2021 according to provisional estimates, slightly up from the 1.1% increase recorded between the second and third quarter.

In the G7, quarter-on-quarter GDP growth accelerated to 1.2 % in the fourth quarter of 2021 from 0.9 % in the third quarter, driven by increases in the United States (1.7 %, compared with 0.6 % in the previous quarter), Canada (1.6 %, compared with 1.3 %) and Japan (1.3 %, compared with minus 0.7 %).

GDP growth slowed markedly in major European economies in Q4 2021, including France (to 0.7 %, compared with 3.1 % in the previous quarter) and Italy (to 0.6 %, compared with 2.6 %). In Germany, GDP contracted by 0.7 % in Q4 2021 compared with growth of 1.7 % in Q3 2021. In the United Kingdom, GDP growth stabilised at 1.0 % in Q4 2021.

Canada has now exceeded its pre-pandemic level of GDP by 0.2 % compared with Q4 2019, joining the United States and France which regained their pre-pandemic levels in Q2 2021 and Q3 2021 respectively. GDP in other G7 countries remained below pre-pandemic levels, with the largest gap in Germany, still 1.5 % below the level recorded in Q4 2019.

In the United States, final domestic demand grew by 0.5 % in Q4 2021, while rebuilding of stocks contributed 1.2 percentage points to the 1.7 % quarter-on-quarter GDP growth. In Japan, the main drivers of Q4 GDP growth were private consumption (1.4 percentage points) and exports (0.2 percentage points), while government consumption, investment and destocking each removed 0.1 percentage points from overall growth.

Among other OECD countries for which data are available for the fourth quarter of 2021, Colombia and Israel recorded the highest increases in GDP compared with the previous quarter (4.3 % and 3.9 %, respectively), followed by Hungary (2.1 %), Spain (2.0 %), Poland (1.7 %), Portugal (1.6 %) and Sweden (1.4 %). Decreases were recorded in Austria (minus 2.2 %) and Latvia (minus 0.1 %).

Looking back on growth for 2021 as a whole, according to initial estimates GDP in the OECD area increased by 5.5 % in real terms following the sharp fall recorded in 2020 (minus 4.6 %) due to the COVID-19 pandemic. Among G7 countries, the United Kingdom saw its economy shrink the most in 2020 (minus 9.4 %) and recorded the highest annual growth in 2021 (7.5 %). France experienced an increase of 7.0 % in 2021 compared with a contraction of 7.9 % in 2020, while Italy’s economy expanded by 6.4 % in 2021 after contracting by 8.9 % in 2020.

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