Japanese Economy Returns to Growth in Q4


The Japanese economy advanced 0.3 percent quarter-on-quarter in the December quarter 2018, reversing from an upwardly revised 0.7 percent contraction in the previous period and compared to market expectations of a 0.4 percent growth, a preliminary estimate showed. Both household consumption and business investment rebounded strongly following a string of natural disasters.

In the three months to December, positive contribution to the GDP growth came from private demand (0.5 percentage points), of which private consumption (0.3 percentage points) and capital expenditure (0.4 percent). In addition, public demand added 0.1 percentage points, while exports had a negative contribution of 0.3 percentage points and changes in private substracted 0.2 percentage points off of growth.

Private demand expanded 0.7 percent in the fourth quarter, swinging from a 0.6 percent decline in the preceding period, due to a strong rebound in private consumption (0.6 percent vs -0.2 percent in Q3) and compared to market estimates of a 0.8 percent increase. Also, capital expenditure expanded 2.4 percent, rebounding from a downwardly revised 2.7 percent drop in the third quarter and beating forecasts of a 1.8 percent gain.

Additionally, public demand rose 0.4 percent, rebounding from a 0.3 percent decline in the prior quarter, as government spending rose far faster (0.8 percent vs 0.2 percent in Q3), while public investment declined  at a softer rate (-1.2 percent vs -2.1 percent).

Exports of goods and services went up 0.9 percent, swinging from a 1.4 percent drop in the September quarter and marking the steepest growth in  a year. Meantime, imports grew by 2.7 percent, after a 0.7 percent contraction in the previous three months and reaching the strongest gain since the March quarter 2014.

On an annualized basis, the economy grew 1.4 percent, after an upeardly revised 2.6 percent contraction in the September quarter and matching market consensus. The rebound in economic activity was supported by solid rises in both private and public demand following a series of natural disasters that halted production.

Japanese Economy Returns to Growth in Q4


Cabinet Office l Rida Husna | rida@tradingeconomics.com
2/14/2019 12:59:35 AM