Japan GDP Seen to Have Posted 1st Drop in 5 Quarters in Oct.-Dec.
Tokyo, Feb. 4 (Jiji Press)--Japan's real gross domestic product is believed to have dropped for the first time in five quarters in October-December 2019, due in part to a pullback in domestic demand after a tax hike, according to estimates by 10 think tanks.
The research institute on average expect that the country's seasonally adjusted GDP in the period shrank a real 3.6 pct from the previous quarter on an annualized basis. Their estimates range from a drop of 4.4 pct to a fall of 2.3 pct. The Cabinet Office is scheduled to announce preliminary GDP data for the third quarter of fiscal 2019 on Feb. 17.
In July-September, Japan's real GDP grew as a last-minute rise in domestic demand ahead of the consumption tax hike to 10 pct from 8 pct in October and robust capital spending by Japanese firms more than offset a fall in external demand reflecting prolonged trade friction between the United States and China.
But all 10 institutes believe that private consumption declined in the latest quarter, citing a pullback in demand after the tax hike, damage from strong Typhoon Hagibis, which hit Japan in October, and sluggish sales of seasonal products amid relatively warm winter weather.
In addition, they project capital expenditures, mainly by manufacturers, fell back.
[Copyright The Jiji Press, Ltd.]