Japan Q1 GDP Growth Shrinks for First Time in 9 Quarters


The Japanese economy contracted 0.2 percent quarter-on-quarter in the March quarter of 2018, unchanged from the preliminary figure and after an upwardly revised 0.3 percent growth in the previous period. It is the first contraction since the fourth quarter 2015, as an unexpected decline in household consumption offset a rise in business spending.

In the three months to March, negative contribution to GDP growth came from private demand (-0.2 percentage points), of which private residential investment (-0.1 percentage points) and change in private inventories (-0.2 percentage points), while private consumption gave no contribution and business spending added 0.1 percentage points to growth. At the same time, public demand made no contribution to growth while net exports added 0.1 percentage points.

Private demand declined by 0.3 percent, similar to the preliminary figure. Private consumption fell by 0.1 percent, compared to a flat reading in the preliminary estimate and markets expectation of a 0.4 percent rise. It follows an upwardly revised 0.3 percent rise in the previous quarter. Also, private residential investment dropped by 1.8 percent, less than the earlier estimate of a 2.1 percent fall and following a 2.7 percent decrease in Q4. Meantime, private non-residential investment/business spending grew by 0.3 percent, way better than the preliminary figure of a 0.1 percent decline and beating market forecasts of a 0.2 percent increase and after a 0.7 percent rise in the prior quarter. 

Meanwhile, public demand was flat, the same as in the preliminary estimate. Government consumption increased by 0.1 percent, compared to a flat reading in the preliminary estimate and similar to the figure recorded in the December quarter. At the same time, public investment declined by 0.1 percent, compared to the preliminary figure of no growth and after a 0.4 percent fall in the prior quarter.

Exports grew by 0.6 percent, the same as in the preliminary figure and compared to a 2.2 percent growth in the December quarter. Imports went up by 0.3 percent, unrevised from an earlier estimates and following a 3.1 percent growth in the preceding quarter.

On an annualised basis, the economy shrank 0.6 percent, the same as the preliminary estimate but worse than market consensus of a 0.4 percent contraction and following an upwardly revised 1 percent expansion in the preceding quarter. It is the first contraction in more than two years, ending the longest straight period of uninterrupted growth in 28 years. 


Japan Q1 GDP Growth Shrinks for First Time in 9 Quarters


Cabinet Office | Rida | rida@tradingeconomics.com
6/8/2018 10:54:55 AM