Investment and private consumption push OECD GDP growth up to 0.7% in Q4 of 2016: OECD

OECD annual GDP grew by 1.8% in 2016 against 2.4% growth in 2015

Real GDP in the OECD area increased by 0.7% in the fourth quarter of 2016, compared with 0.5% in the previous quarter, according to provisional estimates. Investment and private consumption made the largest contributions to OECD growth of 0.3 and 0.5 percentage point, respectively (up from 0.0 and 0.3, respectively in the third quarter of 2016.)

For 2016 as a whole, OECD annual GDP grew by 1.8%, mainly driven by private consumption (which contributed 1.4 percentage point) and to a lesser extent by government consumption and investment (each contributing 0.3 percentage point). Net exports and destocking dragged annual OECD growth down by minus 0.1 percentage point each.

Drivers of GDP growth varied across the Major Seven economies

In the United Kingdom, GDP increased by 0.7% (up from 0.5%). Significant destocking in the fourth quarter (which contributed minus 1.6 percentage point, compared with 1.2 percentage point in the previous quarter) was more than offset by a strong rebound in foreign trade (1.7 percentage point, up from minus 1.4).Private consumption added another 0.4 percentage point.

In Canada, GDP growth slowed to 0.6% (down from 0.9% in the previous quarter), mainly reflecting destocking (which contributed minus 0.7 percentage point, compared with 0.4 in the previous quarter). The contribution from investment also decreased significantly (minus 0.3 percentage point, down from 0.0). These negative contributions were partially offset by a strong improvement in net exports and increased government consumption (1.3 and 0.1 percentage point respectively, up from 0.3 and minus 0.1).

In the United States, GDP growth slowed to 0.5%, compared with 0.9% in the previous quarter, mainly reflecting a reduced contribution from net exports (minus 0.5 percentage point, down from 0.2 in the previous quarter) and also, albeit more moderately, from government consumption. These effects were partially offset by positive contributions from private consumption, stockbuilding and investment.

In Germany, GDP growth picked-up to 0.4% (up from 0.1% in the previous quarter), driven by higher private consumption, government consumption and investment (0.2 percentage point each, from 0.1, 0.0 and 0.0 respectively). These positive contributions were slightly offset by net exports (minus 0.4 percentage point, from minus 0.3).

GDP increased by 0.4 % in France (up from 0.2% in the previous quarter), mainly reflecting a rebound in the foreign trade balance (0.1 percentage point from minus 0.6) and increased contributions from private consumption and investment (0.3 and 0.1 percentage point respectively, from 0.0 each). These positive contributions were partially offset by destocking (minus 0.2, from 0.7).

In Japan, GDP growth was stable (at 0.3%). Lower contributions from net exports (0.2 percentage point, compared with 0.4 in the previous quarter) and private consumption (0.0 percentage point compared with 0.2) were offset by increased contributions from investment and government consumption.

In Italy, the slight deceleration of GDP growth (0.2%, compared with 0.3% in the previous quarter) reflected destocking and slowing private consumption while government consumption and net exports made positive contributions (0.1 and 0.0 percentage point respectively, from 0.0 and minus 0.2).

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