Japan: GDP growth weaker than initially reported due to deteriorating domestic demand
March 10, 2014
GDP expanded 0.7% over the previous quarter in seasonally adjusted annualized terms (SAAR) in Q4 according to new data that was released on 10 March. The increase was below the 1.0% rise reported in the first estimate and marked the slowest pace of expansion since Q4 2012. On an annual basis, economic activity expanded 2.6% in Q4 (previously reported: +2.8% year-on-year). In the full year 2013, GDP expanded 1.5%, which was a tad down from the 1.6% increase initially reported, but marked an improvement over the 1.4% rise tallied in 2012. The deterioration over the initial estimate was due to less resilient domestic demand, while the contribution from the external sector was virtually unrevised. Private consumption expanded 1.6% in Q4, which was below the 2.0% increase that had been reported previously. Government spending slowed modestly to a 1.9% increase (previously reported: +2.0% quarter-on-quarter SAAR). Private non-residential investment fared worse than initially reported, expanding 3.0% (previously reported: +5.3% qoq SAAR), while gross fixed investment moderated to a 6.4% increase (previously reported: +8.0% qoq SAAR). The Bank of Japan (BoJ) expects the economy to expand between 0.9% and 1.5% in the fiscal year ending in March 2015. In the subsequent fiscal year, the BoJ sees GDP growth of between 1.2% and 1.8%. FocusEconomics Consensus Forecast panelists see GDP expanding 1.5% in the calendar year 2014, which is down 0.1 percentage points from last month's projection. In 2015, the panel sees the economy growing 1.3%.