- Some upside risk to our 2Q real GDP growth forecast
• 2Q real GDP growth could possibly reach mid-2% qoq annualized (our current estimate is +0.9%)
• The main factor that could push up real GDP growth is net exports, which grew more strongly than anticipated, as suggested by monthly trade data
• On the outlook for exports, we remain cautiously optimistic over the medium term, as we expect Asian economies will continue to grow
• Yet, we are not confident of a robust positive feedback effect on domestic demand, as the level of economic activity is unlikely to recover enough to promote business fixed investment
- Nominal trade suplus dropped in April-June for the first time in five quarters
• Nominal trade surplus dropped in April-June for the first time in five quarters on the decline in exports
• Prices in transportation, real estate services, etc. continued to fall on weak domestic demand and the cautious stance among corporations for increasing capex spending.
- Demand for loans remains weak
According to the Senior Loan Officer Opinion Survey on Bank Lending Practice in July, the DI for demand for loans among firms worsened 7pts from the previous survey to -17
CreditSuisse Japan Economics Weekly 20100729
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