Sunday, August 3, 2008

Lower dollar value and stimulus packaging are finally paying off

real GDP QoQ in Q2 08 is 1.9%, the highest increase in two years. The previous three quarters were revised downwards. In particular, the Q4 07 was revised to -0.2%, the worst in the two years. The major contributor to the high GDP increase is net exports, which accounted for 2.42% to GDP Q0Q, the highest pace since 2004. The seasonally adjusted net exports is –395.2 bil, almost halved after peaking in Q4 07 at –637.8 bil. The continuous devluation helps shore up the GDP by lowering trade deficit. The trend will keeping goin for a while, probably until the begining of next year. In addition, nondurable goods contributed 0.83% to the real GDP Q0Q growth. It reversed the negative contribution in Q1 08 and contributed most in 2 years. Probably the stimulus packaging take effect. The effect will extend into Q3, after which the impact will fade.

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