11.16.2001
3Q01 GDP results looking at 5% decline

• The Directorate General of Budget, Accounting and Statistics (DGBAS) will release 3Q01 GDP results this afternoon. We forecast 3Q01 GDP will shrink 4.85% YoY, as a 28.7% drop in exports (in US$ terms) dragged down domestic demand. Consumption is likely to remain flat while private investment will continue to post double-digit declines. When the gov't last revised its GDP expectations in Aug., it forecast 3Q01 GDP would fall 2.5% while full-year GDP would see a 0.4% decline. We expect the gov't to sharply revise down its figures today. We forecast 2001 GDP will contract 2.5%. We do not expect today's releases to have a significant impact on the market as the bad economic news is already largely discounted. In our view, external factors will continue to lead the market.