MNI BRIEF: Japan Q2 GDP Seen Higher On Public Investment

Japan’s economy in the April–June quarter is likely to have grown slightly faster than the initial estimate as public investment improved, though capital spending and private consumption were little changed, according to economists surveyed after a key government release.

The median forecast of seven economists puts revised Q2 GDP at +0.3% q/q, or an annualised +1.2%, compared with the preliminary +0.3% q/q, or +1.0% annualised.

Public investment is expected to be revised to flat on quarter from the initial -0.5%. 

Capital expenditure is forecast to be adjusted down to +1.2% from +1.3%, after Ministry of Finance data showed non-financial firms’ investment excluding software rose only 0.2% q/q in Q2, slowing sharply from +2.0% in Q1. 

The MOF survey, based on demand-side figures, is a key input into GDP revisions (due Sept. 8) and contrasts with the preliminary supply-side estimate of +1.3% capex.

Private consumption is projected to remain unrevised at +0.2% q/q, while private-sector inventories are expected to subtract 0.3 percentage points from GDP, also unchanged. 

Net exports are forecast to contribute +0.3 percentage points, in line with the preliminary estimate.