Jul-Sep 2021 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Jul-Sep 2021 (2nd preliminary est) was revised downwards to -3.6% q/q annualized (-0.9% q/q), a decline in the growth rate in comparison to the 1st preliminary results which were at -3.0% q/q annualized. Looking at performance by major component, capital investment and housing investment were revised upwards, as well as exports and imports. On the other hand, personal consumption, private sector inventory, and public demand were all revised downwards. This confirms the sense that economic activity declined during the Jul-Sep period due to automobile production cuts caused by factors such as the difficulty of procuring parts, and the declaration of a state of emergency.

◆The Oct-Dec period real GDP growth rate is expected to be at +7.6% q/q annualized. Although we need to remain vigilant regarding the Omicron variant of COVID-19, consumer spending is expected to expand, centering on services and durable goods, due to the ongoing normalization of economic activity and the recovery in automobile sales. Meanwhile, demand components such as exports and capital investment are expected to achieve growth. Oct-Dec period real GDP is expected to recover almost to the level recorded before the pandemic (the Oct-Dec period of 2019). Real GDP is expected to clearly exceed that level in the Jan-Mar period of 2022.