Japan - GDP

Q3 GDP data worse than initially reported on weaker investment

Economic activity fared worse than initially expected, after GDP contracted 1.9% in Q3 over the previous quarter in seasonally adjusted annualized terms (SAAR), according to new data released on 8 December. The reading was below the 1.6% decline reported in the first estimate and marked the second consecutive quarter of contraction, thereby confirming that Japan entered into technical recession. On an annual basis, economic activity fell 1.3% in Q3, which undershot the 0.4% drop tallied in Q2.

The downwardly revised figure showed that domestic demand was weaker than previously estimated, while the contribution from the external sector was left unchanged. Although growth in private consumption kept the previous 1.5% estimate, growth in government spending was weaker, moderating to 1.1% (previously reported: +1.3% quarter-on-quarter SAAR). Gross fixed capital formation declined a sharper 3.5% (previously reported: -2.2% qoq SAAR), while private non-residential investment contracted more than initially reported, falling 1.5% (previously reported: -0.9% qoq SAAR).

The Bank of Japan (BoJ) expects the economy to expand between 0.6% and 1.3% in the fiscal year ending March 2015. In the subsequent fiscal year, the BoJ sees GDP growth of between 1.2% and 1.6%. FocusEconomics Consensus Forecast panelists see GDP expanding 1.3% in calendar year 2014, which is down 0.2 percentage points from last month’s projection. For 2015, the panel also sees the economy growing 1.2%.

Japan - GDP Data

2009   2010   2011   2012   2013  
Economic Growth (GDP, annual variation in %)-5.5  4.7  -0.5  1.4  1.5  

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Japan GDP Chart

Japan GDP
Note: Annual variation of gross domestic product (GDP) in %.
Source: Cabinet Office and FocusEconomics calculations.

Japan Facts

Value Change Date
Bond Yield0.3012.60 %Jan 28
Exchange Rate117.6-0.27 %Jan 28
Stock Market17,7960.15 %Jan 28

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