Apr-Jun 2021 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Apr-Jun 2021 (2nd preliminary est) was revised upwards to +1.9% q/q annualized (+0.5% q/q), increasing the growth rate in comparison to the 1st preliminary results which were at +1.3% q/q annualized. Government consumption, private non-residential investment, and personal consumption were revised upwards, while private sector inventories and public investment were revised downwards. This confirms the sense that the economy is gradually making a comeback despite the declaration of a third state of emergency during the period due to the spread of COVID-19. All private sector demand related components with the exception of inventory grew in comparison with the previous period despite the difficult situation of increasing COVID-19 infections.

◆The Jul-Sep period real GDP growth rate is expected to grow by +1.1% q/q annualized under the assumption that the current state of emergency will be extended beyond the planned end date of Sept.12 till the end of the month. While personal consumption is expected to decline by a small amount, exports and private non-residential investment, as well as public demand and other components are expected to achieve growth, helping to push GDP up. If vaccination progresses smoothly, real GDP is seen recovering to the level of that experienced during the Oct-Dec period of 2019, before the pandemic began. However, this outlook is highly uncertain. Mutant strains of COVID-19 are still a major downside risk; hence we must remain vigilant.