Japan avoids technical recession as revised fourth-quarter data reveals economic growth of 0.4%.
- Japan's GDP grew 0.4% in the fourth quarter compared to the previous year, despite provisional data indicating a 0.4% contraction in the previous quarter.
- In the fourth quarter, Japan's GDP grew 0.1% compared to the previous three months, despite provisional data indicating a 0.1% contraction.
Japan avoided a technical recession as revised official data on Monday revealed that the economy grew in the October-December period last year, despite a decline in private consumption.
Despite upward revisions being weaker than anticipated, there were rising expectations that the Bank of Japan may normalize interest rates as early as its March 18-19 meeting.
Japan's GDP grew 0.4% in the fourth quarter, lower than the predicted 1.1% growth in a Reuters poll. Provisional data indicated a contraction of 0.4% in the previous quarter, and the economy had shrunk 3.3% in the July-September period.
Despite provisional data showing a 0.1% contraction in Japan's fourth-quarter GDP, the economy expanded 0.1% from the previous three months, weaker than the median forecast for 0.3% growth in a Reuters poll.
In a client note, Marcel Thieliant, head of Asia-Pacific at Capital Economics, stated that the upward revision to GDP growth in the second estimate released today was smaller than most had anticipated.
"The upward revision in business investment, from a 0.1% q/q decline to a 2.0% q/q increase, was partially offset by a decline in inventories and a larger fall in private consumption."
Despite high inflation, domestic demand and private consumption have been negatively impacted, indicating the vulnerability of the country's growth. In fact, private consumption decreased by 0.3% quarter on quarter, which is higher than the provisional estimates of a 0.2% decline.
According to three sources, Reuters reported that the Bank of Japan is likely to revise its evaluation of consumption and production at its upcoming policy board meeting on March 18-19.
The government's capital expenditure increased by 2% quarter over quarter, exceeding its initial estimate of a 0.1% decline but falling short of the anticipated 2.5% rise in spending.
The release of Ministry of Finance data last Monday showed that capital expenditure increased by 16.4% in the fourth quarter compared to the previous year, and by 10.4% on a seasonally adjusted quarterly basis, boosting hopes for an upward GDP revision.
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Asia Economy
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