GDP growth rate
1. Based on new information gathered on key sectors of the economy and performance observed in the first nine months of 2018:
· GDP at market prices would grow by 3.8%, lower than the 3.9% growth forecasted in September 2018;
· GVA at basic prices would grow by 3.6% instead of 3.7% as forecasted in September 2018.
2. Main contributors to the 3.6% growth in GVA at basic prices are: “Financial and insurance activities” (0.6 percentage point), “Wholesale & retail trade; repair of motor vehicles and motorcycles” (0.5 percentage point), “Construction” (0.4 percentage point) and “Accommodation and food service activities” (0.3 percentage point), partly offset by “Agriculture, fishing and forestry” (-0.1 percentage point).
Consumption and Saving
3. Final consumption expenditure of households and general government would grow by 3.4% in 2018 compared to 2.9% in 2017. Gross Domestic Savings (GDS) as a percentage to GDP at market prices for 2018 would be 9.6 compared to 10.1 in 2017.
4. Investment would grow by 6.6% in 2018, higher than the 4.7% growth in 2017, mostly explained by a higher growth expected in public sector investment. Private sector investment is expected to grow by 3.1% in 2018, lower than the 7.3% growth in 2017, and public sector investment to rebound by 17.8% in 2018, after a contraction of 2.9% in 2017. Exclusive of aircraft and marine vessel, investment would grow by 7.8% compared to 5.6% in 2017.
5. Investment rate works out to 18.0% in 2018 against 17.4% in 2017. Exclusive of aircraft and marine vessel, the rate would be 18.0% compared to 17.2% in 2017. Private investment rate would be 13.3% in 2018, same as in 2017 and public investment rate 4.7% in 2018 compared to 4.1% in 2017.
6. The share of private sector investment in GFCF is expected to decrease to 73.7% in 2018 from 76.3% in 2017 while that of the public sector would increase to 26.3% from 23.7% in 2017.
7. GDP at market prices is forecasted to grow by around 4.0% in 2019. Based on recent past trends and taking into account policy measures announced in the budget 2018/2019, GVA at basic prices is expected to grow by 3.8% in 2019, higher than the 3.6% growth in 2018.
The main assumptions used for the forecast of 2019 are as follows:
a) Agriculture, forestry and fishing: to grow by 2.3% based on a sugar production of around 320,000 tonnes same as in 2018 and an expected increase of 2.7% in non-sugarcane agricultural activities.
b) Manufacturing: to expand by around 1.7%, higher than the 0.8% growth in 2018.
c) Construction: to grow by 8.5% compared to 9.5% in 2018, assuming implementation of major public investment projects announced in the last budget.
d) Accommodation and food service activities: to grow by 3.5% based on tourist arrivals forecasted at around 1,450,000 compared to 1,397,000 in 2018.
e) Financial and insurance activities: to grow by 5.4%, same as in 2018.
f) Other sectors: growth rates based on recent past trends.