Economy Grows for Fourth Quarter on Strong Exports

Feb. 15, 2017

The Japan News reports:

Japan’s economy grew for the fourth consecutive quarter in October-December thanks to strong exports that more than offset sluggish personal spending.

In the third quarter of fiscal 2016, the country’s seasonally adjusted gross domestic product rose 0.2 in real terms from the previous quarter, for annualised growth of 1.0%, the Cabinet Office said in a preliminary report.

The annualised reading compared with a median forecast of a 1.1 percent rise among 22 economic research instituted polled by Jiji Press.

In nominal terms, October-December GDP posted a 0.3% rise, which translates into 1.2% growth at an annual rate, according to the government data.

“The Japanese economy is expected to grow moderately,” Economic and Fiscal Policy Minister Nobuteru Ishihara told a press conference, while showing his intention to closely monitor developments in overseas economies and global financial markets amid growing uncertainties.

Among private-sector experts, Shunsuke Kobayashi, economist at the Daiwa Institute of Research, said, “The country’s GDP posted growth as expected, but the results were not so good.”

“The economy may nearly have been at a standstill,” he said, noting that private consumption was particularly weak. “It’s difficult to predict an acceleration in the pace of the economic recovery this year, with real wages unlikely to increase markedly as prices rise,” Kobayashi said.

According to the government data, domestic demand made a contribution of minus 0.0 percentage point to the quarter-on-quarter real GDP growth in October-December, while external demand, or net exports, helped push up GDP by 0.2 point.

Still, it remains to be seen whether the Japanese economy will continue to be supported by external demand as policies of the administration of U.S. President Donald Trump, who has voiced displeasure at his country’s massive trade deficit with Japan, may affect Japanese companies’ U.S.-bound exports, analysts said.

Personal spending, which accounts for some 60 percent of the country’s GDP, dropped 0.01% in real terms from the previous quarter, down for the first time in four quarters. Although expenditures on eating out increased, spending was sluggish for vegetables reflecting price surges attributable to unfavourable weather.

Exports increased 2.6@ on the back of robust shipments of automobiles to the United States and China. Exports of electronic parts, including semiconductors, were also strong. Imports were up 1.3%.

Source: The Japan News Online, 14 February 2016


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