Real GDP rose by +1% q/q in Q4 2018 (after +0.6% in Q3) supported by solid growth in domestic demand. Both private and government consumption increased in Q4, by +1% q/q (up from +0.5%) and +3.1% (after +1.5% q/q) respectively. Investment growth recovered to +1.8% q/q (from -4.6% in Q3) helped by capital spending in construction and equipment. The contribution of net trade to Q4 growth was negative as exports decreased by -2.2% q/q while imports increased by +0.6%. Going forward, short term indicators such as monthly exports (-1.2% y/y in December) and Manufacturing PMIs point to weaker growth. Export growth will likely moderate in 2019 due to slower global economic growth. However, domestic demand should show resilience thanks to a string of supportive policy measures of the government (e.g. increases in minimum wages and social spending). We expect economic growth to ease to +2.5% in 2019 (from +2.7% in 2018).
