OECD GDP grows by 0.5% for the second quarter in a row

 

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21 Nov 2023 - Gross domestic product (GDP) in the OECD rose by 0.5% in the third quarter of 2023, the same pace as the previous quarter, according to provisional estimates (Figure 1).

In the G7, quarter-on-quarter GDP growth picked up to 0.6% in Q3, from 0.4% in Q2, driven by a significant acceleration of GDP growth in the United States (1.2% in Q3, compared with 0.5% in Q2). The remaining G7 countries recorded zero, close-to-zero, or negative growth in Q3: growth was flat in Canada, Italy, and the United Kingdom, 0.1% in France, and negative in Japan and Germany (-0.5% and -0.1% respectively).

Several G7 countries have published more detailed information on the main factors driving these changes in GDP. In the United States, the acceleration in GDP growth was driven by an increase in private consumption by 1.0% in Q3, compared with 0.2% in Q2. In Japan, investment was a drag on growth, reflecting mainly the effect of destocking; net exports (exports minus imports) also weighed on growth due to a 5.0% increase in service imports in Q3. Similarly, in France, destocking and net exports dragged down growth, in this case reflecting a 1.4% drop in exports. In the United Kingdom, private and government spending fell by 0.4% and 0.5% respectively in Q3, and fixed investment by 2%. According to preliminary analyses released nationally, zero growth in Italy reflected a reduction in domestic demand (including changes in inventories), while the GDP contraction in Germany was driven by lower private consumption.

Among other OECD countries for which data is available, Poland and Costa Rica recorded the strongest GDP growth (1.4% and 1.3% respectively) in Q3, followed by Hungary and Mexico (both 0.9%). By contrast, GDP contracted most in Ireland (-1.8%), followed by Finland (-0.9%).

GDP in the OECD exceeded its pre-pandemic (Q4 2019) level by 6.0% in Q3 2023 (Figure 2). Revised data from the United Kingdom^[1]shows that UK GDP exceeded its pre-pandemic level for the first time in Q4 2021, and in Q3 2023 GDP was 1.8% higher than in Q4 2019. Czechia is the only OECD country that has not yet reached its pre-pandemic level.

 

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