Apr-Jun 2017 2nd Preliminary GDP Estimate
GDP growth registers +2.5% q/q annualized (+0.6% q/q) despite downward revision of private sector corporate capex
September 08, 2017
Summary
◆The real GDP growth rate for Apr-Jun 2017 (2nd preliminary est) was revised downwards to +2.5% q/q annualized (+0.6% q/q) in comparison to the 1st preliminary report (+4.0% q/q annualized and +1.0% q/q), while at the same time falling below market consensus (+2.9% q/q annualized and +0.7% q/q). The downward revision was due mainly to a major downward revision in private sector corporate capex. Despite this fact, results remain unchanged from the 1st preliminary in that all major domestic demand components contributed positively to GDP growth, including private sector corporate capex, personal consumption, housing investment, government consumption, and public investment. Hence an overly pessimistic reaction is unnecessary.
◆Overall, these results confirm our main scenario, which sees Japan’s economy moving toward a moderate recovery and expansion. We again point out that Japan’s economy has shifted from growth driven by overseas demand to growth driven by domestic demand.
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