The fact that all components of domestic demand – private and government consumption, construction and machinery and equipment investment – contributed to growth in the second quarter comes as a positive development that bears testimony to the broad-based nature of the upswing. In particular, this fuels hopes of an ongoing upward trend in investment activity, which remains subdued.
In arithmetic terms, the external contribution put a damper on growth. This can, however, be traced back to a significant increase in real imports, which is due, in turn, to the strong domestic economy. Real exports also expanded in the second quarter, but at a slower rate than imports. Given that the global economy is in good shape, we expect to see exports provide further economic impetus as the year progresses despite the appreciation of the euro. Real exports are tipped to increase by around 4% on average in 2017.