Jan-Mar 2017 2nd Preliminary GDP Estimate
GDP growth revised downwards unexpectedly due to progress in inventory adjustment; +1.0% q/q annualized (+0.3% q/q)
June 08, 2017
Summary
◆The real GDP growth rate for Jan-Mar 2017 (2nd preliminary est) was revised downwards to +1.0% 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 (+2.5% q/q annualized and +0.6% q/q). The downward revision was due mainly to progress in inventory adjustment associated with economic recovery, causing fluctuations in private sector inventory to be revised downward considerably. Hence, an overly pessimistic reaction is unnecessary.
◆Overall, these results confirm our main scenario, which sees Japan’s economy moving toward a moderate recovery. We again point out that Japan’s economy has shifted notably into balanced growth driven equally by domestic and overseas demand.
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