Slower growth highlights fragility Japanese economy At a time when the risk of a slowdown in the US economy and further weakness in… Chinese economy Which may negatively affect Japanese exports.
However, stronger than expected private consumption supports the outlook Central Bank of Japan A strong recovery driven by rising wages and consumption will help inflation reach its 2 percent target sustainably, thus justifying interest rate hikes.
The data showed that the increase in GDP was faster than the average market estimate of 0.7 percent, but slower than the revised growth of 2.2 percent in the previous quarter.
The reading means a quarterly rise of 0.2 percent, in line with the average forecast of economists in a Reuters poll.
And rose Consumption Private sector data, which represents more than half of economic output, increased by 0.9 percent, exceeding market estimates of 0.2 percent and up from the revised 0.7 percent for the previous quarter.
“The huge increase in consumption was a big surprise,” said economist Kengo Tanahashi at Nomura Securities.
He said this may reflect one-time factors such as the recovery in car production after safety certification scandals and the strengthening of temporary income tax cuts.
Overall, Tanahashi said, the data bodes well for further interest rate increases.
“GDP growth at around 0.9 percent is slightly higher than the potential growth rate,” he said.
Low capital investment hinders the growth of the Japanese economy
decreased Capital spendingwhich is the main driver of growth led by private demand, grew by 0.2 percent in the third quarter, in line with Reuters poll expectations.
Economists said the slowdown in overseas economies has pressured machinery investments in sectors such as chip manufacturing equipment.
The Bank of Japan maintained very low interest rates last month and said that risks surrounding the US economy were beginning to ease, indicating that conditions were ripe for raising interest rates again.
“We expect the economy to continue to recover on the back of improved working conditions and wages,” Economy Minister Ryusei Akazawa said at a press conference. “But we will need to be cautious about downside risks from external economies and volatility in financial and capital markets.”
Economist Kazutaka Maeda at the Meiji Yasuda Research Institute also confirmed the minister’s view Japanese economy.
He said: “US President-elect Donald Trump’s promise to impose new tariffs on all imports may have a negative impact on Japan’s exports, but wage growth, if it continues next year, will continue to support domestic consumption.”
