Japan: Economy rebounds less than initially expected in Q3
December 9, 2011
In the third quarter, GDP rebounded 5.6% over the previous quarter in seasonally adjusted annualised terms, according to a second estimate released on 9 December. The reading was revised down 0.4 percentage points from the preliminary data published by the Cabinet Office (CO) on 14 November but, nevertheless, represented the fastest pace of growth since the first quarter of 2010. In the second quarter, the economy contracted 2.0%. The revision confirmed that the third quarter's expansion was mainly driven by an improving external sector and resilient private consumption. In contrast, investment disappointed. Private consumption, which makes up about 60% of GDP, expanded 3.0% over the previous quarter (previously estimated: +3.9% quarter-on-quarter in seasonally adjusted annualised terms), while government spending grew 0.9% (previously estimated: +1.6% qoq saar). Private non-residential investment fell 1.6% over the previous quarter, which contrasted the 4.4% expansion previously reported. Exports of goods and services soared 32.7% in the third quarter (previously estimated: +27.4% qoq saar), while imports expanded 14.9% (previously estimated: +14.5% qoq saar). As a result, the external sector's annualised net contribution to overall growth improved from a previously reported 1.7 percentage points to 2.3 percentage points. According to the December forecast, the government expects economic activity to contract 0.1% this fiscal year ending in March 2012 and to expand 2.2% in the next fiscal year.