Ja­pan grows at 0.5% an­nual pace in Oct-Dec

Sun.Star Cebu - - BUSINESS - AP

Ja­pan’s econ­omy grew at a slower than ex­pected 0.5 per­cent an­nual pace in the Oc­to­ber-De­cem­ber quar­ter, as strong ex­ports failed to fully com­pen­sate for rel­a­tively weak do­mes­tic de­mand.

The pre­lim­i­nary data re­leased Wed­nes­day show Ja­pan has man­aged eighth straight quar­ters of growth, the long­est ex­pan­sion since the fi­nan­cial bub­ble of the late 1980s. Growth for the en­tire cal­en­dar year was 1.6 per­cent, up from 0.9 per­cent in 2016.

But the fig­ures for the last quar­ter were mostly be­low ana- lysts’ fore­casts.

“GDP growth slowed sharply last quar­ter and we think that the econ­omy won’t ex­pand as strongly this year as it did in 2017,” Mar­cel Thieliant of Cap­i­tal Eco­nom­ics said in a com­men­tary.

He noted that “ca­pac­ity short­ages,” where short-handed or in­ad­e­quately equipped fac­to­ries can­not keep up with de­mand, tend to slow growth. “Over the last two decades, GDP has never risen by more than 1 per­cent over the com­ing year when ca­pac­ity short­ages were as pro­nounced as they are now,” Thieliant said.

Growth in the pre­vi­ous quar­ter was re­vised down to 2.2 per­cent from 2.5 per­cent.

Hous­ing in­vest­ment weak­ened although over­all con­sumer spend­ing, which ac­counts for the lion’s share of ac­tiv­ity, was higher.

The econ­omy grew 0.1 per­cent in quar­terly terms. The lack­lus­ter per­for­mance re­flects the dif­fi­culty of stim­u­lat­ing more in­vest­ment and spend­ing as Ja­pan’s pop­u­la­tion ages and de­clines.

Ja­pan’s cen­tral bank has been infusing tril­lions of yen (hun­dreds of bil­lions of dol­lars) of cash into the econ­omy through re­ces­sion-fight­ing as­set pur­chases, mostly of govern­ment bonds, to counter de­fla­tion. /

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