April-June GDP growth cut to annual 2.5 %

September 8, 2017

TOKYO- Japan's seasonally adjusted gross domestic product in April-June grew an annualized 2.5 percent from the previous quarter in price-adjusted real terms, up for six straight quarters but far weaker than the preliminary reading of a 4 percent rise, the Cabinet Office said Friday.

On a quarter-on-quarter basis, Japan's GDP in the first three months of fiscal 2017 rose a revised 0.6 percent, compared with the 1.0 percent increase reported in August, the government agency said.

The downward revisions reflect sluggish capital spending, as shown in the Ministry of Finance's corporate activity survey released earlier this month.

Although the 0.6 quarter-on-quarter rise was the strongest since the 1.1 pct increase in January-March 2015, the margin of the downward revision in the annual growth was the biggest since comparable data became available for April-June 2010.

Still, a Cabinet Office official said, "There is no change in the economy's domestic demand-led growth on the back of steady private consumption."

In nominal terms, the country's April-June GDP rose 0.7 percent from the preceding three months, for an annualized increase of 3.0 pct, bleaker than the preliminary growth of 1.1 percent and 4.6 percent, respectively.

In the revised data, corporate capital expenditures grew a real 0.5 percent quarter on quarter, substantially lower than the 2.4 pct rise in the preliminary data. The growth of private consumption was revised down to 0.8 percent from 0.9 percent, and that of housing investment to 1.3 percent from 1.5 percent.

Meanwhile, public-sector investment expanded a revised 6 percent, up from the preliminary reading of 5.1 percent growth, thanks to the full-fledged launch of projects included in the government's fiscal 2016 second supplementary budget. Jiji Press