Analysts expect core inflation, which excludes state-controlled and volatile prices, to rise slightly to 2.5% in the fourth quarter of 2024, from 2.3% previously.
the latest updates from the High Commission for Planning (HCP) forecast that national GDP will increase by 3% in the fourth quarter of 2024 before accelerating to 3.5% in the first quarter of 2025.
These forecasts depend on the agricultural sector, with the assumption of a return of precipitation to seasonal levels close to normal during the winter.
The HCP forecasts that non-agricultural activities will maintain growth above trend in the medium term, with rates of 3.7% and 3.5% expected in the last quarter of 2024 and the first quarter of 2025 respectively. Domestic demand will remain the main driver of economic activity, although its pace will slow slightly compared to the third quarter.
Household consumption is expected to continue to grow, supported by social and fiscal measures targeting both the public and private sectors, as well as a decline in inflation.
The data projects that household spending will increase by 3.2% in the fourth quarter of 2024 and 3.4% in the first quarter of 2025, year-on-year. Government consumption will also contribute to growth due to increased spending on goods, services and operations, the HCP noted.
-While private companies are expected to reduce their investment activities due to slowing external demand growth and rising wage costs, public investments in infrastructure, sporting events and water desalination projects will remain strong. HCP forecasts that gross investments will increase by 9.8% in the last quarter of 2024 and by 8.8% in the first quarter of 2025.
International trade will continue to have a negative impact on overall growth, but experts expect this effect to ease in early 2025. Analysts predict that exports will increase by 7.1% in the first quarter of 2025 , compared to 6.2% in the previous quarter, while imports are expected to grow at a slower pace due to subdued domestic demand.
The HCP forecasts that inflationary pressures will remain limited during this period. The data also forecasts consumer prices to rise 0.7% in the fourth quarter of 2024, compared to 1.3% in the previous quarter. This decline reflects a slower increase in the prices of non-food and food products, as well as a continued decline in the prices of fresh produce. Global energy prices are also expected to contribute negatively to overall inflation.
MK/te/APA
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