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Table 3: Economic forecast summary Calendar Year Fiscal Year Quarterly 2015 2016 2017 2018} 2015 2016 2017 2018) 3016 4Q16 1Q17 2017 3Q17 4Q17 1018 (A) (F) (F) F) (A)__(F) F F) (A) (fF) s+) a Real GDP %,qoq ann. 0.6 07 14 2 0.9 14 4 2 22 03 2.1 5 1.0 24 01 Private Consumption %,qoq ann. -1.2 04 1.0 2 0.1 0.6 ; 3 0.2 1.0 12 0 14 14 08 Private Capex %,qoq ann. 1.6 06 7 3.2 2.1 07 24 29 0.1 5.0 0.8 4 25 70 3.1 Private Resid. Investment —_(%,qoq ann. 25 5.3 03 jl 24 64 -13 qT 96 -20 20 -39 5.9 6.1 1.6 Government Consumption (%,qgoq ann. 1.2 1.6 08 0 16 11 09 Al 17 08 06 2 08 08 08 Public Investment %,qoq ann. 25 15 3.1 -2.1 27 09 A Of 27 16 82 148 -115 -78 3.9 Exports of Goods & Services (%,goqg ann. 28 -0.3 53 3.1 04 09 58 23 8.1 45 45 59 11.0 46 = -3.0 Imports of Goods & Services (%,qoq ann. 04 -13 3.9 18 00 04 43 14 24 90 2.0 46 118 19 -16 Contribution points Domestic Demand %,yoy 0.2 05 12 09 08 08 jl 1.0 0.2 14 17 2 11 3 0.2 Net Exports %,yoy 0.4 0.2 03 0.2 0.1 0.2 0.3 0.2 20 08 0.4 02 01 1 03 Industrial Production %,qoq 1.4 07 06 6 25 A 09 %,yoy -12 -08 35 3.6 -14 04 42 3.0 0.4 12 17 3.1 42 49 46 Nationwide BOJ-style Core CPI (%,yoy 0.5 -0.3 1.0 1.4 00 86-0. sy 14 05 -01 07 07 13 4 14 Nationwide US-style Core CPI %,yoy 1.0 04 04 11 0.6 03 06 13 0.2 0.1 02 02 05 07 09 Unemployment Rate %) 3.4 3.1 29 27 33 3. 28 26 3.1 3.0 3.0 29 29 28 28 BoJ ST interest rate target End of period) -0.1 -0.1 -0.1 -0.1 01 0. O01 01 O01 01 O01 O11 O01 O01 -01 BoJ LT interest rate target End of period) nla 0.0 0.0 0.0 nla 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Yeni$ End of period) 120.2 1080 120.0 115.0) 1126 1120 1150 115.0} 1014 1080 1120 1150 117.0 120.0 115.0 Yen/Euro End of period) 1306 1166 126.0 121.0) 1281 1176 1240 1210) 1139 1166 1176 1173 1193 1260 1240 Note: We may revise our forecasts once additional data become available. Sources: Bo}, MoF, ESRI of Cabinet Office(EPA), MPMHAPT(MCA), METI(MITI), Ministry of Land, Infrastructure and Transport and BofA Merrill Lynch Global Research estimates. Bankof America 12 Japan Economics Viewpoint | 18 November 2016 Merrill Lynch HOUSE_OVERSIGHT_014421