Japan’s Revised Oct.-Dec. GDP Growth Estimated at Annualized 12.5 Pct

Economy

Tokyo, March 2 (Jiji Press)--The revised growth rate for Japan’s price-adjusted real gross domestic product in October-December 2020 will be 12.5 pct on an annualized basis, according to the average estimate by 11 private-sector think tanks.

The annualized quarter-on-quarter figure is almost the same as a rise of 12.7 pct shown by the government’s preliminary report, as capital spending is expected to be lower than initially estimated as suggested by just-released Ministry of Finance data while public investment is projected to be higher.

The MOF data showed that capital spending by Japanese firms fell 4.8 pct year on year in October-December to extend the losing streak to a third quarter, with manufacturers, notably food and machine producers, slashing spending by 8.5 pct and nonmanufacturers, such as transport and goods leasing firms, by 2.6 pct.

Specifically, the think tanks on average project a 3.7 pct rise in fixed business investment from July-September, against the preliminary growth estimate of 4.5 pct.

There is no change in their estimates that capital investment took the first upturn in three quarters. But the research institutions came up with the weaker revised figure because “companies remain reluctant to boost investment in plant and equipment in view of slow sales recovery amid the prolonged coronavirus pandemic,” an official at the Daiwa Institute of Research said.

[Copyright The Jiji Press, Ltd.]

Jiji Press