This is an explanatory document regarding changes in estimation methods for the Q2 2025 Quarterly GDP Flash Report (First Preliminary Report) announced by the National Accounts Department, Economic and Social Research Institute, Cabinet Office.
Regarding seasonal adjustment, dummy variables for abnormal value processing that had been set considering the impact of COVID-19 will continue to be set as additive outlier processing dummy variables with a 99% confidence interval for outlier determination, based on discussions in the Systematic Development Committee for National Economic Accounts of the Statistics Commission, starting from the Q3 2024 Quarterly GDP Flash Report (Second Preliminary Report) for the time being. The set dummy variables are published along with each quarterly GDP flash report.
For R&D (Research and Development) output, market producer output is estimated based on the most recent First Annual Estimate as a benchmark, using research and development investment amounts from the most recently available "Tankan" (Short-term Economic Survey of Enterprises in Japan). R&D output for non-market producers (private non-profit institutions serving households and general government) is estimated by trend-extending the most recent First Annual Estimate to obtain current year values, then quarterly-dividing based on the previous year's pattern.
R&D output (total market producers) for each quarter in FY 2024 and FY 2025 shows FY 2024 estimates of 18.2 trillion yen (6.2% increase from previous year), with quarterly figures of 4.4 trillion yen for Q1 (6.4% increase), 4.5 trillion yen for Q2 (6.2% increase), 4.6 trillion yen for Q3 (6.0% increase), and 4.8 trillion yen for Q4 (6.2% increase).
The article demonstrates that improvements in estimation methods are being pursued to appropriately handle COVID-19 impacts and reflect steady growth in the R&D sector for enhanced GDP statistics accuracy.