TOKYO :Japan’s economy grew a tad slower than initially estimated in the fourth quarter, revised government data showed on Thursday, weighed down by weak consumption and underscoring the fragility of its recovery.
Gross domestic product (GDP) for the world’s third-biggest economy expanded by an annualised 0.1 per cent in October-December, against a preliminary estimate of a 0.6 per cent expansion and much lower than economists’ median forecast for a 0.8 per cent rise in a Reuters poll.
The expansion translates into a flat quarter-on-quarter change, data released by the Cabinet Office showed, against a preliminary reading and economists’ estimate for 0.2 per cent growth.
Private consumption, which makes up more than half of the country’s GDP, grew 0.3 per cent, the data showed, downgraded from an initial estimate of a 0.5 per cent increase and dragging the overall reading down.
Capital spending declined 0.5 per cent, unchanged from a preliminary estimate and comparing with a median market forecast for a 0.4 per cent contraction, despite Ministry of Finance data last week showing an uptick in manufacturers’ output capacity.
Domestic demand as a whole knocked 0.3 per centage point from revised GDP growth, while net exports added 0.4 per centage point.
Urged by the government and the Bank of Japan amid four-decade-high inflation, major Japanese firms are set to deliver the largest pay rise in 26 years at the annual “shunto” spring wage negotiations wrapping up this month.
But the expected average salary hike of around 3 per cent will likely include just a 1 per cent increase in base pay, casting doubt on whether Japan can achieve the kind of sustained wage gains the central bank sees as key to stably hitting its 2 per cent inflation target.
