Econintersect: Japan’s economy slumped in the third quarter but still managed to beat expectations. GDP advanced by 0.5% vs. consensus expectations of 0.4%. The growth was a significant slowdown from the 0.9% increase registered in the second quarter. This was the fourth consecutive quarter of growth, the longest sequence since 2010. The third quarter number was dragged down by low capital expenditure growth (0.2%) and by private consumption (0.1%). All the reports are for quarter-to-quarter growth. Year-over-year GDP was up by 1.9%.
Observers expect growth to pick up in the next two quarters, driven by higher consumption ahead of a consumption tax increase in April 2014. The most negative factor was net exports which subtracted o.5% in the third quarter. That also should improve as globally economies appear to be strengthening.
The following graph from Trading Economics shows the history over the past five years.
Sources:
- Japan Q3 GDP slows, consumption expected to pick up again (Tetsushi Kajimoto and Stanley White, Reuters, 14 November 2013)
- Japan GDP Growth Rate (Trading Economics)