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Japan: Revised data show softer GDP contraction in Q2

September 9, 2015

Revised data confirmed that the Japanese economy contracted in Q2, albeit at a slower pace than previously reported. GDP fell 1.2% in Q2 over the previous quarter in seasonally adjusted annualized terms (SAAR), according to new data released on 8 September. The reading was above the 1.6% drop reported in the first release and represented a sharp reverse from the 4.5% increase tallied in Q1. On an annual basis, economic activity rose 0.8% in Q2, which was slightly up from the 0.7% increase tallied in the first estimate.

The upwardly revised figure showed that private and government consumption fared better than in the previous estimate, while investment recorded weaker figures. The contribution to growth from the external sector was left unchanged. Although private consumption fell 2.7% in Q2, it was above the 3.0% drop initially reported. Government spending rose 2.0% (previously reported: +1.7% quarter-on-quarter SAAR). Gross fixed capital formation expanded 0.6% (previously reported: +3.2% qoq SAAR) and private non-residential investment fell 3.6% (previously reported: -0.3% qoq SAAR).

The Bank of Japan (BoJ) expects the economy to expand between 1.5% and 1.9% in the fiscal year 2015, which ends in March 2016. In the subsequent fiscal year, the BoJ sees GDP growth of between 1.5% and 1.7%. FocusEconomics Consensus Forecast panelists see GDP expanding 0.8% in calendar year 2015, which is down 0.1 percentage points from last month’s projection. In 2016, the panel sees the economy growing 1.4%.


Author: Ricard Torné, Lead Economist

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Japan GDP Chart


Japan GDP Q2 2015 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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