Japan’s economy shrank more sharply in the third quarter than previously estimated, according to a revised release from the Cabinet Office of Japan on Monday.
The revised annualised contraction came in at 2.3%, compared with an earlier reading of a 1.8% decline and a median forecast for a 2.0% fall.
On a quarter-on-quarter basis, gross domestic product fell 0.6%, steeper than the initial 0.4% contraction and exceeding a median forecast of a 0.5% decline.
Private consumption -- a key engine of the economy -- managed a modest rebound, rising 0.2% compared with a 0.1% uptick in the preliminary reading. Meanwhile, capital expenditure was revised downward sharply, showing a 0.2% drop instead of the 1.0% rise initially reported.
External demand remained a drain on growth, with net exports subtracting 0.2 percentage points, while domestic demand contributed a 0.4-point drag, worse than earlier estimates.
The deeper contraction reflects lingering headwinds from weak global demand, trade frictions, and subdued private investment. The weaker reading could complicate near-term economic prospects for Japan, even as policymakers weigh fiscal and monetary measures to support growth.
The data could also temper near-term expectations of a Bank of Japan rate hike, as focus remains on new Prime Minister Sanae Takaichi’s plans for more fiscal spending.
Source: Investing