Domestic demand would have increased by 5.4% in the fourth quarter of 2024, according to the recent economic update from the High Commission for Planning (HCP).
« In the fourth quarter of 2024, domestic demand would have continued to support activity, recording an increase of 5.4%, reducing its contribution to overall economic growth to 6.2 points.“, indicates the HCP in this economic update.
Household consumption would have maintained its dynamic, showing an increase of 3.2% in annual variation and thus contributing 2 points to GDP growth, specifies the HCP.
Despite the drop in rural incomes due to the persistence of the drought, several factors would have supported the purchasing power of households, notably the general stabilization of prices, apart from those of certain food products, the increase in salaries in the public sector, social transfers, as well as the resumption of consumer credit.
And note that this positive dynamic would have driven the increase in imports of finished consumer products, particularly automobiles (+58.1%) at the end of 2024.
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Public administration consumption, for its part, would have increased by 3.9%, slightly higher than 3.8% recorded in the previous quarter, in line with the increase in administrative operating expenses.
For its part, investment would have maintained strong momentum in the fourth quarter of 2024, driven mainly by the consolidation of its public component, in particular through hydraulic development projects and the various projects linked to the preparations for the two major sporting events, namely CAN 2025 and the 2030 World Cup.
Private investment, for its part, would have readjusted in the face of the moderation of exports. Overall, gross investment would have increased by 9.8% year-on-year, thus contributing 3.5 points to overall economic growth.
This trend would have been corroborated by an increase in foreign direct investment and an increase in imports of industrial capital goods.
Strengthening domestic demand supported a more than doubling increase in the economy’s external financing needs, standing at -3.8% of GDP in the third quarter of 2024.
Despite a significant improvement in private savings, the expansion of investments was more vigorous, leading to a rise in the budget deficit and an increase in corporate debt.
With MAP
