GDP growth slowed to +2.3% y/y in Q3 from +3.3% y/y in Q2 on the back of slower export growth. Domestic demand was the main driver this time, driven by a surge in investment (+17.5% y/y after -2.6% y/y in Q2). Private consumption rose moderately (+1.9% y/y). Looking ahead, downside risks are elevated. The Manufacturing PMI decreased to 48.7 points in October (from 50.8 in September) with a drop in output and new orders. Corporate sentiment is weak due to ongoing trade tensions and a slowdown in global demand growth. In that context, growth will mainly rely on domestic demand and macroeconomic policies. We expect the Central Bank to maintain its easing stance in the short run (policy rate at 1.375%) and fiscal policy to turn accommodative. Economic growth is expected to slow to +2.3% in full-year 2019 (from +2.6% in 2018).
