Japan: Economic activity slows more than initially reported
September 10, 2012
In the second quarter, GDP rose 0.7% over the previous quarter in seasonally adjusted annualised terms, which was half the revised 1.4% rise recorded in the first estimate released on 13 August. Moreover, the reading was well below the 5.3% rise tallied in the first quarter (previously reported: +5.5% quarter-on-quarter saar) and undershot the 1.0% increase anticipated by market analysts. The deterioration over the initial estimate was mainly caused by a weaker performance in the domestic sector. Private consumption expanded a mild 0.5% in the second quarter (previously estimated: +0.6% qoq saar), while government spending rose 0.6% (previously estimated: +1.2% qoq saar). Meanwhile, private non-residential investment increased 5.6% (previously estimated: +6.3% qoq saar). Exports of goods and services expanded 5.0% over the previous quarter in annualized terms (previously estimated: +4.8% qoq saar), while imports rose 6.7% (previously estimated: +6.4% qoq saar). As a result, the external sector's annualised net contribution to overall growth remained unchanged at the minus 0.1 percentage points initially reported. The Bank of Japan expects economic activity to expand between 2.1% and 2.4% in the fiscal year ending in March 2013 before, moderating to a range of between 1.5% and 1.8% in the following fiscal year.