Japan GDP Contracts More than Anticipated


The Japanese economy shrank 0.6 percent on quarter in the third quarter of 2018, faster than a preliminary estimate of a 0.3 percent drop and market expectations of a 0.5 percent decline. It is the steepest contraction since the second quarter of 2014, following a downwardly revised 0.7 percent expansion in the previous period. Natural disasters like flood and earthquake weighed more on personal consumption and capital investment than initially estimated.

Private consumption declined 0.2 percent, faster than a 0.1 percent fall in the preliminary estimate and capital investment shrank 2.8 percent, compared to a preliminary drop of 0.2 percent. Public investment shrank 2 percent, also faster than 1.9 percent in earlier figures. Net external demand contributed negatively (-0.1 percentage point), matching earlier estimates as exports shrank 1.8 percent and imports fell 1.4 percent.
 
On the  other hand, rises were seen in private residential investment (0.7 percent compared to a preliminary of 0.6 percent) and government spending (0.2 percent, in line with the previous release).
 
On an annualized basis, the economy shrank 2.5 percent, much worse than preliminary estimates of a 1.2 percent fall and forecasts of a 1.9 percent decline. It is the steepest contraction since the second quarter of 2014 and follows a downwardly revised 2.8 percent growth in the second quarter. Capital expenditure slumped 10.6 percent, private spending went down 0.7 percent and external demand contributed negatively (-0.3 percentage points).

Japan GDP Contracts More than Anticipated


Cabinet Office | Joana Taborda | joana.taborda@tradingeconomics.com
12/10/2018 12:29:32 AM