Finance Think: Inflation rises to 12.3% on annual basis in Q2 2022
Skopje, 10 September 2022 (MIA) – In Q2 2022, GDP increased by 2.8 percent on an annual basis. This growth is similar to the dynamics in 2021, but it is below the expected, it was achieved in conditions of heightened uncertainty resulting from the Russia-Ukraine conflict, as well as amid accelerated price growth. This situation is connected to the low growth in the manufacturing industry (1.5 percent), as well as the prolonged stagnation in construction (0.2 percent), reads an analysis by Finance Think.
On the other hand, it adds, post-pandemic consolidation continued with solid dynamics of 8.1 percent in trade, transport and hospitality.
“Exports and imports have maintained their dynamics since the beginning of the year, 14.7 percent and 25.2 percent, respectively, while gross investment recorded a surprisingly high growth (46.5 percent), but it is probably related to the accumulation of inventories ahead of growing uncertainties on the global stage,” according to Finance Think’s macro-monitor.
The stable labor market and wage growth, it reads, supported private consumption, albeit with a slightly slower growth (4 percent), while public consumption recorded a sharp decline of 7.2 percent, which is in line with the disproportionate realization of the budget deficit (one quarter for half a year).
“Unemployment in Q2 2022 further decreased slightly, to 14.5 percent from the previous 14.8 percent (Q1 2022). Employment also recorded a slight improvement, from 47.1 percent to 47.3 percent, but there are no particular signs of significant reactivation of the able-bodied population that became passive during the pandemic,” adds the analysis.
According to Finance Think, in Q2 2022, inflation rose to 12.3 percent on an annual basis. This price growth is almost entirely driven by global pressure on the prices of primary products and energy, but they have also spread to the wider consumer basket, particularly in the area of housing, transport and hospitality services.
“Uncertainty in economy remains high, while stagflation visible in Q2 2022 will deepen by the end of the year, with an increased likelihood of a recession from the beginning of next year. Despite the reduction in food prices on global markets since June 2022, further increase in energy prices indicates a longer duration of price pressure compared to previous expectations. Hence, Finance Think has revised downwards the forecast for GDP growth in 2022 to 2.1 percent (from the previous 2.8 percent), while the forecast for the annual inflation rate upwards to 12.2 percent (from the previous 9.7 percent),” says Finance Think.
