Jan-Mar 2022 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Jan-Mar 2022 (2nd preliminary est) was revised upwards to -0.5% q/q annualized (-0.1% q/q), a reduction in the extent of decline in comparison to the 1st preliminary results which were at -1.0% q/q annualized. Looking at performance by major component, contribution from change in private inventories was 0.3%pt higher than the first preliminary estimate, while private non-residential investment shifted into the negative range. The findings of this estimate confirm once again that the economy has deteriorated due to sluggish consumer spending following the rapid worsening of the COVID-19 infection situation, and supply constraints have brought unavoidable production cuts in motor vehicles.

◆The 2022 Apr-Jun period real GDP growth rate is expected to be at +3.5% q/q annualized. If this outlook is realized, real GDP will have recovered to the level seen before the spread of COVID-19 (the Oct-Dec period of 2019). While highs in the price of resources and a weak yen have brought rising prices in a wide range of commodities, a major accumulation of household savings should disperse some of the negative effects on personal consumption. For the time being, attention should be paid especially to trends in exports of goods, which may swing downward depending on trends in overseas economies.