Domestic spending growth rate declines in Q2 of 2022

• Domestic spending growth rate declines in Q2 of 2022
• Real household consumption expenditure grew by 8.5 percent in Q1
• Real exports of goods and services increased by 10.12%

In the second quarter of 2022 (Q2’22), growth in household consumer expenditure has further slowed down against the backdrop of ongoing inflationary pressures, rising unemployment, and rising poverty rates.

Real household final consumption expenditure increased by just 2.32 percent in the second quarter of this year, Q2’22, according to the National Bureau of Statistics (NBS) GDP, Expenditure and Income Approach report for Q1 and Q2 2022, which was released yesterday. This represents a 6.2 percentage point quarter-over-quarter (QoQ) decline in growth rate when compared to the 8.5 percent growth recorded in Q1’22.

NBS said: “On a quarter-on-quarter basis, real household consumption expenditure grew by 8.5 percent in Q1, and 2.3 percent in Q2’22. Household final consumption, in real terms, grew by 6.94 percent and 17.6 percent in Q1 and Q2’22 respectively, on a YoY basis.

“However, these growth rates were lower compared to the growth rate of their corresponding quarters of 2021 which recorded 47.16 percent and 42.4 percent respectively.

“The observed trend since 2020 indicates that real household consumption expenditure declined in Q1 and Q2, accounting for negative growth rates informed by the COVID-19 pandemic.

“However, positive growth rates were recorded in Q3 and Q4 of 2020 as well as the four quarters of 2021. As the economy recovers from the shock of the pandemic, Q1 and Q2’22 growth rates have shown lower rates relative to the corresponding quarters of 2021.

“Household consumption accounted for 76.79 percent of real GDP at market prices in Q1’22, and 78.9 percent in Q2’22.”

“In response to falling growths in exports and imports in 2020, growth in the net balance of trade (or net exports) was negative from Q3’20 to Q3’21 but positive in Q4’21.

“On a year-on-year, YoY, basis, Q1’22 recorded a -98.46 percent growth rate in real terms and Q2 indicated a -92.76 percent growth in the net trade balance.”

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According to NBS, real exports of goods and services increased by 10.12% and -30.52 percent year over year in the first and second quarters of 2022, respectively, compared to -70 percent and 28.45 percent in the corresponding quarters of 21. A change from the positive trend seen since Q2’21, QoQ growth in real exports was negative in Q1’22.

“However, a positive rise of 5.76 percent was recorded in Q2’22, which is a change from the rate in Q1’22.

Regarding imports, it was noted that they had increased by 24.8 percent in the first quarter and somewhat decreased by 0.37 percent in the second. Import numbers increased by 40.34 percent and 56.9 percent, respectively, in Q1 2022 and Q2 2022.

These growth rates were greater than in Q1 2021 and lower than in Q2’21.
“In 2020, imports of goods and services declined significantly in the four quarters of the year in real terms but rose since Q1 2021. by 0.47 percent.