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Japan: GDP growth stronger than initial estimate on robust domestic demand

June 9, 2014

GDP expanded 6.7% over the previous quarter in seasonally adjusted annualized terms (SAAR) in Q1 according to new data that was released on 9 June. The increase was well above the 5.9% rise reported in the first estimate and marked the fastest pace of expansion since Q3 2011. On an annual basis, economic activity expanded 3.1% in Q1 (previously reported: +3.0% year-on-year).

The upwardly revised growth figure was driven by stronger domestic demand, while the contribution from the external sector was not revised. Private consumption expanded 9.2% in Q1, which was above the 8.5% increase that had been reported previously. Government spending was virtually unchanged at 0.4% growth. Private non-residential investment fared better than initially reported, expanding 34.2% (previously reported: +21.0% quarter-on-quarter SAAR), while gross fixed investment followed suit and accelerated to a 19.4% increase (previously reported: +12.1% qoq SAAR).

The Bank of Japan (BoJ) expects the economy to expand between 0.8% 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 1.5%. FocusEconomics Consensus Forecast panelists see GDP expanding 1.4% in calendar year 2014, which is up 0.1 percentage points from last month’s projection. In 2015, the panel also sees the economy growing 1.2%.


Author: Ricard Torné, Lead Economist

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Japan GDP Chart


Japan GDP Q1 2014 2

Note: Quarter-on-quarter seasonally adjusted annualized changes and annual variation of GDP in %.
Source: Cabinet Office (CO) and FocusEconomics Consensus Forecast.


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