Japan’s economy grew at a slightly slower rate than initially reported for the April-June period, according to revised government data released on Monday. The downward revision was driven by lower-than-expected corporate and personal spending.
Japan’s gross domestic product (GDP) increased at an annualized rate of 2.9% in the second quarter compared to the previous three months. This figure is lower than the earlier preliminary estimate of 3.1% and fell short of economists’ median forecast of 3.2%, according to the Cabinet Office’s revised data.
In quarter-on-quarter terms, Japan’s GDP grew by 0.7% in price-adjusted terms, down from the previously reported 0.8% increase.
Despite the downward revision, analysts predict that Japan’s economy will continue to experience gradual improvement, supported by rising wages and stable personal and corporate spending. However, risks remain due to potential economic slowdowns in major trading partners, including the U.S. and China.
The Bank of Japan raised its key interest rate to 0.25% in July, after maintaining rates in the 0-0.1% range. The markets are now closely watching for signals regarding the timing of further monetary tightening, particularly in light of domestic consumption trends and other economic indicators.
A Reuters poll conducted last month found that none of the economists surveyed expected a rate hike at the Bank of Japan’s upcoming policy meetings on September 19-20, though many predicted a tightening of policy by the end of the year.
The revised data also showed that capital expenditure, a key indicator of private sector demand, rose by 0.8% in the second quarter, slightly lower than the initial estimate of 0.9%. Economists had anticipated a 1.0% increase in this category.
Private consumption, which accounts for over half of Japan’s economic activity, grew by 0.9%, down from the preliminary estimate of 1.0% growth.
External demand, calculated as exports minus imports, subtracted 0.1 percentage points from overall growth, consistent with the initial estimate. Meanwhile, domestic demand contributed 0.8 percentage points to the economy’s expansion.
