| Consensus | Consensus Range | Actual | Previous | |
| Quarter over Quarter | 0.0% | 0.0% to 0.0% | -0.1% | 0.2% |
| Year over Year | 1.1% | 1.1% to 1.1% | 0.9% | 1.2% |
Highlights
Economic growth contracted in the first quarter, falling 0.1 percent, while increasing 0.9 percent compared to the first quarter of last year. The result is a weakening from the initial estimates for a 0.2 percent quarter-on-quarter gain and 1.1 percent year-on-year increase. The result is also below the consensus of an Econoday survey of economists' forecasts.
Foreign trade subtracted 0.9 percentage points from the overall first quarter result after having contributed 0.7 percent in the fourth quarter of last year. This came as exports contracted 3.5 percent, while imports showed a more modest 0.9 percent decline.
Conversely, inventories contributed 1.0 percentage points, likely coming from stock building in March resulting from the conflict in the Middle East. Business responded by accelerating production and padding inventories to help get ahead of expected higher prices and supply chain constraints.
Household spending fell for the first time since the first quarter of last year, down 0.2 percent, which comes as little surprise with consumers likely pulling back in the face of economic uncertainty. This is reflected in the purchasing power component of household disposable income which was flat on the month after being up 0.3 percent in the first quarter of last year.
Today’s result shows a weakening economy despite the positive contribution from inventories. Continued restraint from consumers will also likely continue to weigh on growth. While growth was only marginally lower in the first quarter, the risk is that the economy could slip into a technical recession during the second quarter.
Market Consensus Before Announcement
No growth now expected on quarter.