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TOKYO (MNI) - Key points from revised GDP for the July-September quarter of
2017 released by the Cabinet Office Friday. The revision is based on the annual
benchmark revision of GDP -- the largest factor in the upward revision -- as
well as the latest quarterly government business survey on capital expenditures
and inventories as well as other indicators.
* Q3 real gross domestic product was revised up sharply to +0.6% on
quarter, or an annualized +2.5%, from the preliminary estimate of +0.3% on
quarter, or an annualized 1.4%.
* The revision showed the annualized GDP growth rate was well above the
economy's growth potential in the first half of fiscal 2017.
* The main theme in the July-September quarter remained unchanged from the
preliminary estimate -- a rebound in net exports offset a slump in consumer
spending caused by bad weather. The biggest change from the initial estimate was
that domestic demand actually pushed up the overall GDP growth by 0.1 percentage
point, instead of pushing it down by 0.2 percentage point, as originally
* All of the upward revision to the Q3 GDP came from domestic demand,
largely capital investment and private-sector inventories.
* Business investment was revised up to +1.1% on quarter, or an annualized
+4.3%, from the initial reading of +0.2% on quarter, or an annualized +1.0%. It
was the fourth consecutive quarter-on-quarter rise. Its contribution to overall
growth was revised up to +0.2 percentage point from the preliminary estimate of
+0.0 percentage point. It followed a contribution of +0.2 percentage point in
* The contribution of private-sector inventories to total domestic output
was revised up to +0.4 percentage point from +0.2 percentage point.
* Net exports of goods and services -- exports minus imports and the key Q3
growth driver -- made an unrevised positive 0.5 percentage point contribution to
total output. It was the first positive contribution in two quarters after
pushing down Q2 GDP growth by 0.2 percentage point.
* Private consumption, which accounts for about 60% of GDP, fell an
unrevised 0.5% on quarter in Q3, the first drop in five quarters after an
upwardly revised +0.9% in Q2. Consumption trimmed Q3 GDP by 0.3 percentage point
after adding 0.5 percentage point in Q2. The decrease in spending was seen in
automobiles, food and beverages and mobile phones.
* Public investment was revised up to a drop of 2.4% on quarter in Q3 from
a preliminary 2.5% fall but its contribution to Q3 GDP was unrevised at -0.1
* The seventh straight quarterly expansion in GDP followed unusually strong
growth of 0.7% on quarter, or an annualized +2.9%, in April-June (revised up
from +0.6% and +2.6%.) The recent annualized growth pace has been above Japan's
potential growth rate estimated to be just under 1%.
* The sustained growth period is the longest under the current GDP
calculation formula dating to 1994. Previously it was estimated to the longest
in 16 years but the annual revision resulted in a slight contraction in the
final quarter of 1999.
* In the third quarter of this year, seasonally adjusted nominal GDP grew
0.8% on quarter, or an annualized 3.2% (revised up from +0.6% and +2.5%), to a
record Y549 trillion (revised up from Y546 trillion).
* Efforts to improve the GDP calculation by increasing the share of
supply-side information on business investment and private consumption likely
contributed to the upward revision but it is not certain as the impact of the
annual revision is large.
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