Japan’s growth slows amid weak spending

TOKYO: Japan’s economy slowed in the July-toSeptember period amid slumping consumer spending, the government said yesterday.

The world’s third-largest economy expanded at an annualised rate of 1.4% in the three-month period for the seventh straight quarter of growth, the Cabinet Office said. It marked a fall from the 2.6% growth in the April-to-June quarter, the office said.

Yesterday’s reading was also slightly below the 1.5% growth forecast by analysts polled by the Nikkei business daily.

Private consumption, which makes up 60% of output, fell 0.5% quarter-on-quarter, following a 0.7% increase in the April-to-June period, the office said. Consumer spending has been sluggish especially since Prime Minister Shinzo Abe’s government raised the nation’s sales tax to 8% in April 2014 from 5% in the first hike in 17 years.

Stagnant wages have also been blamed for weak consumer spending, analysts said. In 2016, inflationadjusted wages were up only 0.2% from the previous year, a government report showed.

The office also said yesterday that corporate investment barely grew, registering at just 0.2%, compared with a 0.5% increase in the previous quarter.

Exports rose 1.5% quarter-on-quarter for the first expansion in two quarters thanks to a weaker yen and robust demand from China and the United States, while imports were down 1.6%, the office said.

Economic Revitalisation Minister Toshimitsu Motegi told a news conference that the government would strive to foster human resources and improve productivity through a policy package to be adopted in December.

Last month, the Bank of Japan slightly revised up its economic growth forecast for the current financial year to 1.9% from July estimates of 1.8%. It, however, downgraded its inflation forecast to a 0.8% increase for the year through March 2018, from the 1.1% rise estimated in July. – dpa