Chart of the Day: Q1 GDP flash estimate reveals slower-than-expected growth

Check out what to blame.

According to Nomura, the Q1 GDP flash estimate indicated that growth was slower than expected, at -0.6% y-o-y from 1.5% in Q4 (Consensus: 0.0%, Nomura: -1.8%).

The weakness was mainly attributed to the manufacturing sector, which contracted by 6.5% y-o-y in Q1 from - 1.1% in Q4.

Here's more from Nomura:

Growth in the services sector also slowed to 1.2% y-o-y from 1.7% in Q4. Given this, we wait to see whether next month‟s final Q1 data release confirms the flash estimate before assessing whether to downgrade our current 2013 GDP growth forecast of 2.4%.

While Q1 was clearly weak, the official 2013 GDP growth forecast was maintained at 1-3%, on expectations that the economy will see a "gradual improvement for the rest of the year" driven by an external demand recovery.

We view this as optimistic since GDP growth will need to average 3% per quarter for the rest of the year to meet the midpoint of this forecast, well above GDP growth of 1.3% in 2012.

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