Goldman Sachs raised estimate for Japan’s 3Q GDP to +1.5% q/q vs. +1.2% previously

The US banking giant, Goldman Sachs, made upward revisions to the Japanese Q3 growth forecasts, citing better fundamentals seen in August as the reason behind the upgrade.

Key Quotes:

“We raise our tracking estimate for 3Q2017 real GDP to +1.5% qoq annualized, from +1.2% previously

Our upward revision mainly reflects stronger-than expected recovery in export activities since July

Real exports are recovering rapidly, rising +3.0% mom in August, after +1.7% in July

leading us to revise up real GDP export growth to +6.0% qoq annualized from +3.8%

Our forecasts on other demand components are largely unchanged

Personal consumption is likely to decelerate to virtually zero growth in 3Q, following strong 2Q spending

Real core household spending declined -0.1% mom in August following a similar decline in July

Private capex is expected to remain on a moderate recovery path

Meanwhile, a temporary fall-off in public works, which pushed up the overall GDP in 2Q, is inevitable in our view

Production also picked up +2.1% mom in August”