Advertisment

Japan's Q3 Economic Contraction May Be Less Than Estimated, Forecasts Show

author-image
Aqsa Younas Rana
New Update
Japan's Q3 Economic Contraction May Be Less Than Estimated, Forecasts Show

The Japanese economy is projected to depict a minor contraction less than previously anticipated for the third quarter of the year, according to an expert poll. The revision forecasts are primarily driven by a speculated augmentation in private sector capital investment. This provides an insight into the economic performance of Asia's second-largest economy during the third quarter.

Advertisment

Revised GDP Figures

The poll, involving 16 economists, hints at the possibility of real gross domestic product (GDP) figures indicating an annualized contraction rate of 2.0% for the July-September period. This figure, expected to be released on Friday, marks a slight improvement from the preliminary estimate of a 2.1% decrease. The updated GDP data will offer a more accurate depiction of Japan's economic health.

Private Sector Growth Stalls

Advertisment

Additional data from the PMI survey by S&P Global reveals that Japan's private sector growth came to a standstill in November. The flash PMI data signals a potential economic contraction, which may have implications for the upcoming GDP revision. Moreover, inflation in Tokyo has slowed to its most leisurely pace in over a year, reinforcing the Bank of Japan's view that price pressures are currently weakening.

Government's Role in Economy

The Japanese government is planning to extend utility and gasoline subsidies through April as part of its latest set of economic support measures. This attempt to maintain price stability for a longer period could significantly impact Japan's GDP contraction revision. It also provides a glimpse into the government's strategy to mitigate the adverse effects of the economic downturn.

Advertisment
Advertisment