GDP growth picked up to +0.4% q/q in Q3 from +0.2% in Q2. Private consumption was the main explanatory factor (+0.5%), driven by unusual seasonality (recovery in transportation after Q2 strikes, and skyrocketing car output before implementation of new norms). But it showed no catch-up effect from subpar growth in Q4 2017 to Q2 2018. Export growth recovered also (+0.7%) and contributed to the growth acceleration in Q3, after broadly stagnating in H1. Meanwhile, investment patterns remained relatively unchanged. Corporate investment continued to increase (+1.4%), driven by digitalization (half of the growth) and capacity building (the capacity utilization rate is 85.3%). Household investment decreased by -0.2%, after being flat in H1 (and posting +5.6% in 2017). Overall, household spending growth in 2018 is expected to be the lowest (+1%) since 2013 (reflecting purchasing power issues in H1 and increasing savings in H2). We expect +0.3% q/q GDP growth in Q4 (as subdued demand weighs on manufacturing confidence which fell -3 points in October) and +1.5% in full-year 2018. A slight recovery to +1.8% is forecast for 2019, driven by an improving outlook for purchasing power.
