Jul-Sep 2016 2nd Preliminary GDP Estimate
GDP revised downwards. Changes in how GDP is estimated have limited effect on our assessment of the economy
December 12, 2016
Summary
◆The real GDP growth rate for Jul-Sep 2016 (2nd preliminary est) was revised downwards to +1.3% q/q annualized (+0.3% q/q) in comparison to the 1st preliminary report (+2.2% q/q annualized and +0.5% q/q), while at the same time falling below market consensus (+2.3% q/q annualized and +0.6% q/q).
◆Despite the negative outcome for the revised version, its major cause is thought to be the short-term downturn due to inventory fluctuation and major revisions in methods and standards used in estimating GDP. Hence there is no need for pessimism because of these results. Looking at the basic tone of real GDP, our current assessment of the Japanese economy is that it is beginning to move toward making a comeback that should pull it out of its recent lull.
◆Performance by demand component in light of revisions from the 1st preliminary results shows that while private final consumption expenditure was revised upwards, private-sector capital investment, fluctuations in private sector inventory, and net exports were all revised downwards, bringing downward pressure on overall results.
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