Japanese yen

GDP improved to 2.2%, capital investment was favorable in the January-March period

The second preliminary report of the gross domestic product (GDP) for the January-March period of this year announced by the Cabinet Office on a real basis (seasonally adjusted value) excluding the effect of price fluctuations is 0% compared to the previous term (October-December last year).・6% decrease, 2.2% decrease on an annualized basis assuming that this pace will continue for one year.

According to the upward revision of capital investment, the overall GDP was also revised upward from the first preliminary report released last month (annual rate 3.4% decrease). However, the composition where personal consumption decreased due to the impact of the corona shock and fell into negative growth for the second consecutive quarter, remained unchanged.

　The main reason for the upward revision is the upside of corporate capital investment. The statistics on corporate enterprises announced by the Ministry of Finance on 1st of this month showed that it was stronger than the private sector forecast, and as a result, capital investment in the GDP statistics changed from 0.5% decrease from the first quarter of the first bulletin to 1・It increased by 9%.

However, the response rate for the corporate statistics this time is low due to the influence of Corona, and there is a possibility that the capital investment amount will be revised downward in the confirmation report released at the end of July. In that case, GDP is likely to be revised again.

Source: https://shorturl.at/ctI19