Japan Q2 GDP Growth Revised Higher to 0.7%

The Japanese economy advanced 0.7 percent quarter-on-quarter in the June quarter of 2018, stronger than the preliminary figure of a 0.5 percent growth and after a 0.2 percent contraction in the previous period. It was the highest growth rate since the first quarter of 2017, boosted by an upward revision of business spending and a strong rebound in private consumption.

In the second quarter, the largest  contribution to GDP growth came from private demand (0.8 percentage points), of which private consumption (0.4 percentage points) and capital expenditure (0.5 percent). At the same time, public demand and changes in inventories were neutral, while net exports had a negative contribution of 0.1 percentage points.

Private demand increased by 1.1 percent, higher than the preliminary data of a 0.7 percent rise and after declining 0.4 percent in the first quarter of the year. Private consumption went up 0.7 percent, the same as in the preliminary estimate, which was a rebound from a 0.2 percent fall in the prior quarter and matching expectations. In addition, capital expenditure grew by 3.1 percent, far stronger than the preliminary figure of 1.3 percent, which was way faster than a 0.7 percent rise in the March quarter and  beating estimates of 2.8 percent. It was the steepest increase in business spending since the first quarter 2015.

Meantime, public demand went up 0.2 percent, unchanged from the preliminary data, but reversing from a 0.1 percent decline in the March quarter. The rebound was mainly supported by a pick-up in government consumption (0.2 percent vs flat reading in Q1), while public investment showed no growth  (vs -0.4 percent in Q1).
Exports of goods and services grew by 0.2 percent, the same as in the preliminary figure but much softer than a 0.6 percent growth in the first quarter. It marked the weakest reading since the June quarter 2017. Meantime, imports grew by 0.9 percent, slightly lower than the preliminary figure of a 1 percent gain and after a 0.2 percent rise in the March quarter.

On an annualized basis, the economy grew by 3 percent, much faster than the preliminary estimate of a 1.9 percent expansion and easily beating consensus of a 2.6 percent growth. It followed a 0.9 percent contraction in the March quarter and marking the highest annualized figure since the first quarter 2016, due to strength in business spending and household consumption.

Japan Q2 GDP Growth Revised Higher to 0.7%

Cabinet Office l Rida | rida@tradingeconomics.com
9/10/2018 9:58:49 AM