Jan-Mar 2015 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Jan-Mar 2015 (2^nd preliminary est) was revised upwards to +3.9% q/q annualized (+1.0% q/q) in comparison to the 1^st preliminary report (+2.4% q/q annualized and +0.6% q/q). This is the second consecutive quarter of growth in real GDP, and like the 1^st preliminary report, reconfirms that the economy is back on track and in a moderate growth phase. Performance exceeded market consensus (+2.8% q/q annualized), while inventory investment was revised upwards beyond expectations, despite the original outlook expecting a downward revision. Meanwhile, capex performance was revised significantly upwards in comparison with the 1^st preliminary, and as will be covered in more detail later in this report, figures for the Jul-Sep 2014 and Oct-Dec 2014 periods were also revised upwards.

◆Performance by demand component in the revised Jan-Mar 2015 results features upward revisions for capex and inventory investment, which have pushed up overall results. Capex was up by +2.7% in response to corporate statistics, a major upward revision from the 1^st preliminary result of +0.4%. Seasonal adjustment of the capex results also brought an upward revision of the figures for the Jul-Sep 2014 and Oct-Dec 2014 periods. On the 1^st preliminary report capex grew for the first time in four quarters (since the Jan-Mar period of 2014), while on the 2^nd preliminary report, figures for the Jul-Sep 2014 and Oct-Dec 2014 periods were also revised upwards from the originally expected negative figures.