Recent Economic Developments: an overview
Economic activity maintained its growth momentum in 2022:Q3 but rising inflationary pressures and the deterioration in the international environment led to a deceleration of GDP growth. Real GDP fell by 0.5% q-o-q but increased by 2.8% y-o-y in 2022:Q3, mainly driven by private consumption and gross fixed capital formation growth. The rise in exports of services prices induced a weaker than expected real exports of services growth outcome. The fall in government consumption and the increase in imports weighed on GDP growth.
Economic activity increased by 5.9% y-o-y in 2022:9M, a bit less than expected, as a result of the weaker than foreseen growth outcome for 2022:Q3 and the downward revision of growth for 2022:H1.
Inflation accelerated in 2022 (recording an average rise of 9.3%), mainly driven by increases in energy and food prices, also feeding through to core inflation. Inflationary pressures eased in the last three months of last year because of retreating energy prices. As a continuation to the trend recorded in the last quarter of 2022, headline inflation declined further to 7.3% in January 2023 from 7.6% in December 2022.
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