The growth rate of the Gross Domestic Product (GDP) in volume terms (adjusted for seasonal variations) decreased by 0.2% in the third quarter of the current year (July to September 2023) in comparison with the same quarter of 2022 (year-on-year or annual variation), according to preliminary estimates of the Quarterly National Accounts published on Wednesday by the National Statistics Institute (INS).
In terms of quarterly variation (i.e. in relation to the second quarter of 2023), real GDP increased slightly by 0.1%, while in terms of quarterly variation it had fallen by 1.1% in the previous quarter.
Against this background, real domestic demand contracted by 0.4% and made a negative contribution of 0.4 percentage points to economic growth in the third quarter (-0.2).
The external balance, on the other hand, made a positive contribution of 0.2 percentage points, as the volume of exports of goods and services (8.6%) grew slightly faster than imports (6.8%).
The headline growth figure at the end of September is estimated at 0.4%, which is the growth rate expected for the whole of 2023 if real GDP stabilises at the level recorded in the third quarter, bearing in mind that real GDP has not yet reached the level recorded at the end of 2019, before the COVID-19 pandemic crisis.
Sharp contraction in agricultural sector reflects trend in economic growth
As a result of the climatic conditions and the drought of the last three years, agricultural production has declined, which has had a negative impact on agricultural activity (in particular the grain and olive harvesting seasons).
This situation has had an impact on economic growth trends in recent months. In terms of volume, the wealth created in the agricultural sector made a negative contribution of -1.6 percentage points to GDP growth in the third quarter of 2023 (-0.2%).
In the energy, water supply, sewerage and waste management sector, the volume of wealth created fell by 1.2% compared to the same period of the previous year, as a result of the 2.1% decrease in production in the oil and gas extraction sector and the 8% fall in activity in the mining sector.
The industrial sector grew by 0.1% in the third quarter of 2002, compared with the same period of the previous year.
The construction sector recorded negative growth of -5.1 %. Similarly, wealth creation in the services sector increased by 1.9% in the third quarter, contributing 1.3 percentage points to the growth rate in the third quarter of 2023 (-0.2%).
The INS explained this development in the services sector by an increase in wealth created in hotels and restaurants of 10.8%, in IT and communications of 3.6% and in transport of 3.3%.