Japan GDP Contracts More than Anticipated
The Japanese economy shrank 0.6 percent on quarter in the third quarter of 2018, faster than a preliminary estimate of a 0.3 percent drop and market expectations of a 0.5 percent decline. It is the steepest contraction since the second quarter of 2014, following a downwardly revised 0.7 percent expansion in the previous period. Natural disasters like flood and earthquake weighed more on personal consumption and capital investment than initially estimated.
12/10/2018 12:29:32 AM
Private consumption declined 0.2 percent, faster than a 0.1 percent fall in the preliminary estimate and capital investment shrank 2.8 percent, compared to a preliminary drop of 0.2 percent. Public investment shrank 2 percent, also faster than 1.9 percent in earlier figures. Net external demand contributed negatively (-0.1 percentage point), matching earlier estimates as exports shrank 1.8 percent and imports fell 1.4 percent.
On the other hand, rises were seen in private residential investment (0.7 percent compared to a preliminary of 0.6 percent) and government spending (0.2 percent, in line with the previous release).
On an annualized basis, the economy shrank 2.5 percent, much worse than preliminary estimates of a 1.2 percent fall and forecasts of a 1.9 percent decline. It is the steepest contraction since the second quarter of 2014 and follows a downwardly revised 2.8 percent growth in the second quarter. Capital expenditure slumped 10.6 percent, private spending went down 0.7 percent and external demand contributed negatively (-0.3 percentage points).