Jan-Mar 2024 2nd Preliminary GDP Estimate

◆The real GDP growth rate for Jan-Mar 2024 (2nd preliminary est) was -1.8% q/q annualized, reducing the extent of decline in the growth rate slightly in comparison to the 1st preliminary result (-2.0%). While capex and private sector inventories were revised upwards, public investment and private consumption were revised downwards. In addition to major production cuts by certain motor vehicle manufacturers due to the authentication fraud issue, special factors such as the reactionary decline of some services exports in response to results during the previous period were found to have brought significant downward pressure on the GDP growth rate.

◆The Apr-Jun period real GDP growth rate is expected to be at around +2% q/q annualized (around +0.5% q/q). Along with an expected increase in motor vehicle production, the major increase in wages in the spring labor negotiations and improvement in the household income environment due to the Flat-amount Cut of Personal Income Tax and Personal Residence Tax will also contribute to GDP growth. On the other hand, continued attention should be paid to factors such as the downside risk in exports due to deterioration in overseas economies.