OECD members show a modest slowdown in growth in the second quarter
The middle group of 38 OECD economies posted a small easing in the second quarter, with gross domestic product rising 0.4% compared with the prior quarter, following a pace near 0.5% in the first quarter. This pattern fits a broader, steadier growth trajectory that has been evident since the start of 2022, according to the Paris-based organization.
Spain joined the ranks as the thirteenth member to log faster growth this year, climbing to 0.4%. The OECD emphasized that the member country has faced pandemic-related challenges, including a notable GDP contraction of 11.3% in 2020, yet managed to return to its pre-pandemic GDP level by the end of 2020 and to maintain momentum into 2023. The June reading confirmed this turning point, first flagged in June and subsequently confirmed in the late July review.
The OECD, chaired through a partnership between Belgium and Australia, noted that growth among the G7 economies in the second quarter was mixed. The overall pattern showed a rise in GDP, but not uniformly across all large advanced economies. Some, like Japan, saw an uptick from 0.9% to 1.5% in the first quarter, while France improved from 0.1% to 0.5%, as stronger exports offset a lull in private consumption.
Pre-pandemic levels and beyond
Growth also picked up, albeit more modestly, in the United States and the United Kingdom through a blend of investment, private consumption, and public spending. The United States moved from 0.5% to 0.6%, while the United Kingdom rose from 0.1% to 0.2%. Italy’s activity slowed, with domestic demand softening and annual growth slipping from 0.6% to -0.3%. Canada also showed a cooling trend, slipping from 0.8% to 0.3%. Germany faced a downturn as exports fell after two weaker quarters, pulling down overall activity by -0.4% to -0.1% in the period.
Across neighboring economies, Ukraine exhibited a strong rebound, with Lithuania growing 2.8% after a 2.1% decline in the first quarter. By contrast, Poland contracted, slipping from 3.8% to -3.7%. Hungary’s fourth-quarter decline continued, staying negative at -0.3%. Within the OECD as a whole, Ireland led with a 3.3% expansion, followed by Slovenia at 1.4% and Costa Rica at 1.3%. On the downside, several countries reported declines, notably Poland at -3.7%, Sweden at -1.5%, and Colombia showing a marked slowdown.
In aggregate, OECD GDP surpassed its pre-pandemic level from the fourth quarter of 2019, rising about 5.1% in the second quarter of 2023. The same period saw the G7 collectively above that benchmark by around 4%, although the United Kingdom remained slightly under the pre-pandemic peak. Across the rest of the OECD, most member economies with data available topped the 2019 fourth-quarter level, illustrating a broad recovery across the group. The Czech Republic is among those noted in the broader regional overview.