ISET-PI has updated its real GDP growth forecast for the fourth quarter of 2020 and the first quarter of 2021. Here are the highlights of this month’s release:

The real GDP growth rate amounted to -3.9% year-on-year for October 2020. Consequently, the estimated real GDP for the first ten months of 2020 was -5.1%.

Recently, GeoStat released its preliminary estimate of real GDP growth for the first and second quarters of 2020. The Q1 and Q2 growth rates were revised downward to 2.2% (by 0.1 ppt) and -13.2% (by 0.9 ppt) respectively.

As a result of the update, the growth forecast for Q4 of 2020 remained unchanged, at -3.3%. ISET-PI’s second forecast for Q1 of 2021 puts GDP growth at -1.6%.

Based on October’s data, we expect annual growth in 2020 to be -4.6%, which is 0.2 percentage points lower than the previous forecast.

According to ISET-PI’s recent forecast, GDP growth in the first quarter of 2021 decreased from -1.4% to -1.6%. This correction can mostly be explained by GeoStat’s downward revision of the Q1 and Q2 growth rates (by 0.1 and 0.9 percentage points respectively). Otherwise, from the standpoint of the October data, several variables changed significantly, which affected the growth predictions.