September 4, 2023
Gross domestic product (GDP) in the OECD rose by 0.4% quarter-on-quarter in the second quarter of 2023, slightly down from 0.5% growth in the previous quarter, according to provisional estimates. This extends the consistent pattern of moderate growth observed since the first quarter of 2022.
In the G7, quarter-on-quarter GDP growth picked up slightly to 0.5% in Q2 2023, compared with 0.4% in Q1. This reflects a mixed picture among G7 countries. On the one hand, GDP growth increased noticeably in Japan (to 1.5% in Q2 2023, compared with 0.9% in Q1) and in France (to 0.5%, compared with 0.1%). Growth also accelerated, although more marginally, in the United States and the United Kingdom (to 0.6% and 0.2% in Q2, respectively, compared with 0.5% and 0.1% in Q1). On the other hand, GDP contracted in Italy in Q2 2023 (minus 0.3%) following a growth of 0.6% in Q1. Growth also slowed in Canada (to 0.3% in Q2, compared with 0.8% in Q1). Growth was flat in Germany in Q2, after contracting in the two previous quarters.
Several G7 countries have published details of the main factors driving the changes in GDP. In Japan, net exports (exports minus imports) were the main driver of growth, reflecting a 3.2% increase in exports and a 4.3% drop in imports, while private consumption contracted in Q2 (by minus 0.5%). Similarly, in France, net exports supported growth while private consumption contracted (by minus 0.3%). By contrast, in the United Kingdom, increases in private and government spending supported growth while net exports continued to be a dampening factor. The latter was also the case in Germany, reflecting a 1.1% drop in exports. In the United States, investment and private consumption contributed to GDP growth, although private consumption growth decelerated significantly (to 0.4% in Q2, compared with 1.0% in Q1). According to preliminary analysis released by Italy, their GDP contraction reflected a reduction in domestic demand (including changes in inventories).
Of the OECD countries closest (geographically) to the war in Ukraine, GDP recovered strongly in Lithuania in Q2 2023, growing by 2.8%, compared with a contraction of 2.1% in Q1. In contrast, GDP contracted sharply in Poland in Q2 2023 (minus 3.7%) following 3.8% growth in Q1. GDP continued to contract in Hungary (minus 0.3%) for the fourth consecutive quarter.
Among other OECD countries for which data is available, Ireland recorded the strongest GDP growth (3.3%) in Q2, followed by Slovenia (1.4%) and Costa Rica (1.3%). By contrast, GDP contracted in ten OECD countries, most notably in Poland (minus 3.7%) followed by Sweden (minus 1.5%) and Colombia (minus 1.0%).
GDP in the OECD area exceeded its pre-pandemic (Q4 2019) level by 5.1% in the second quarter of 2023. In the G7, GDP exceeded its pre-pandemic level by 4.0%, although in the United Kingdom GDP still remained slightly below its pre-pandemic level. Elsewhere in the OECD, GDP was above Q4 2019 levels in Q2 2023 in all countries for which data was available except the Czech Republic. Spain, the OECD country most severely impacted by the pandemic (with a GDP contraction of 11.3% in 2020), exceeded its pre-pandemic level of GDP for the first time in Q2 2023, by 0.4%.
Source: OECD
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