Econintersect: Japan continues to produce disappointing economic numbers. The fourth quarter (2013) GDP estimate has been revised down to 0.7% annualized from the previous 1.0%. With an increase in the consumption tax starting in April, it was expected that Japan would see stronger growth for 4Q 2013 and 1Q 2014 in an attempt by individuals and businesses to "front-run" the higher cost. It now seems that, for the last quarter at least, there is not much of an effect. The GDP numbers were weakened by lower than expected capital expenditures and personal consumer spending.
A second weaker than expected report has also been released. The current account deficit swelled to ¥1.59 trillion ($15.4 billion) in January. The current account is constructed from the total of trade balance and investment related transactions with the rest of the world. The January number is a record for Japan. As can be seen in the follow graph the record was not by a modest amount: it was 2.5 times the size of the previous record. The Abenomics growth program appears to be in trouble.
- Japan GDP Growth Revised Down (Takashi Nakamichi and Mitsuru Obe, The Wall Street Journal, 09 March 2014))
- Japan fourth-quarter growth, external balance suffer blow in test for Abenomics (Stanley White and Tetsushi Kajimoto, Reuters, 10 march 2014)
- Japan Current Account (Trading Economics, 10 March 2014))