Jan-Mar 2021 1st Preliminary GDP Estimate

◆The real GDP growth rate for Jan-Mar 2021 (1st preliminary est) declined by -5.1% q/q annualized (-1.3% q/q), falling below market consensus. A declaration of emergency was declared for the second time at the beginning of the year due to the spread of COVID-19 leading to the decline, centering on personal consumption. Looking at results by component, in addition to personal consumption, private sector capital expenditure and government consumption, as well as public investment, all contributed to the decline. On the other hand, exports grew for the third consecutive quarter, while housing investment and private sector inventory also contributed to growth.

◆The outlook for the real GDP growth rate in the Apr-Jun period sees negative growth for the second consecutive quarter at around -3% q/q annualized, based on the assumption that the state of emergency will be extended till the end of June. A downturn centering on personal consumption is expected due to the declaration and extension of the state of emergency. In contrast, the Jul-Sep period is expected to experience growth on the high side with the reopening of economic activity. A gradual recovery is expected to ensue after that point. Recovery to the level experienced when real GDP was at its peak before the spread of COVID-19 during the Jul-Sep period of 2019 will likely take until around the Jul-Sep period of 2022.