Japan's GDP revised up to annualized 1.1pc contraction
The nation's economy shrank less than earlier estimated during OctoberDecember last year, mainly reflecting an upward revision to private inventory growth, the government said Tuesday.
The country's gross domestic product contracted a revised 0.3 percent from the previous quarter in price-adjusted real terms for an annualized drop of 1.1 percent, the Cabinet Office said in a revised GDP report.
The figures for the third quarter of fiscal 2015 were better than the fall of 0.4 percent and an annualized 1.4 percent shown in the government agency's preliminary report released last month.
Still, the Japanese economy contracted for the first time in two quarters due to a slump in consumer spending.
The weakness poses a challenge to Prime Minister Shinzo Abe, who is trying to reflate the economy with his Abenomics economic policy.
In nominal terms, the economy shrank 0.2 percent, or an annualized 0.9 percent, also better than the preliminary readings of 0.3 percent and 1.2 percent falls. "Some weakness can be seen in consumption," Economic and Fiscal Policy Minister Nobuteru Ishihara said. However, Ishihara stressed that "there is no change in my view that the Japanese economy's fundamentals remain favorable."
Meanwhile, Koya Miyamae, senior economist at SMBC Nikko Securities Inc., said in a research note that he may have to change his view that GDP will expand in January-March this year.
In real terms, October- December capital expenditures expanded 1.5 percent, up from the preliminary 1.4 percent rise thanks to increased investments in the real industries.
By contrast, private consumption was revised down to a 0.9 percent decrease from a 0.8 percent fall. Public investment declined 3.4 percent, larger than the 2.7 percent drop in the preliminary report.
The revised report also showed that a private-sector inventory change pushed down the overall real GDP growth by 0.04 percentage point, smaller than the 0.1-point negative contribution in the preliminary report.
Exports fell 0.8 percent, better than 0.9 percent, while the fall in imports was unchanged at 1.4 percent. The positive contribution of external demand, or net exports, to overall GDP growth was also unchanged at 0.1 point. Domestic demand made a 0.4-point negative contribution, an improvement from the preliminary negative contribution of 0.5 point.