Economy grows for 8th straight quarter

February 14, 2018

Tokyo- Japan's gross domestic product rose for the eighth straight quarter in October-December last year, the longest growth streak since the 12-quarter expansion marked in the country's bubble economy era in the late 1980s, thanks to steady domestic private demand, government data showed Wednesday.

The country's seasonally adjusted GDP in the latest reporting quarter increased 0.1 percent from the preceding three months in price-adjusted real terms, or 0.5 percent at an annual rate, according to the preliminary report from the Cabinet Office.

The quarter-on-quarter rise followed the 0.6 percent growth in July-September. The annualized rate compared with the median forecast of 0.9 percent growth among 21 economic research institutes polled by Jiji Press.

Japan's GDP expanded for 12 consecutive quarters from April-June 1986 to January-March 1989.

Domestic demand made a 0.1-percentage-point contribution to the quarter-on-quarter GDP growth in October-December, while the contribution from external demand, or net exports, stood at minus 0.03 point.

Personal consumption picked up thanks to an improvement in the employment and income situations. Corporate capital spending was robust amid the economic expansion.

In nominal terms, the October-December GDP fell 0.03 percent quarter on quarter, for an annualized drop of 0.1 percent, reflecting a rise in crude oil prices.

For the whole of 2017, Japan saw its GDP expand 1.6 percent from the preceding year in real terms, up for six years in a row. In nominal terms, the country's GDP grew 1.4 percent to 546 trillion yen, hitting a record high for the second straight year.

"The Japanese economy grew on the back of an increase in private demand," Economic and Fiscal Policy Minister Toshimitsu Motegi told a press conference. Private consumption is expected to continue picking up, he said.

In October-December, personal consumption rose a real 0.5 percent on a quarter-on-quarter basis, after falling back in July-September due to unfavorable weather. Spending was robust on smartphones, automobiles and dining out.

Corporate capital spending increased 0.7 percent, up for five consecutive quarters, reflecting strong investment in machine tools.

By contrast, housing investment shrank 2.7 percent, down for two quarters running, as housing construction starts slumped.

Public investment dropped 0.5 percent, also down for the second consecutive quarter, because the implementation of projects included in the government's fiscal 2016 second supplementary budget has mostly ended.

Exports grew 2.4 percent, led by strong shipments of automobiles and machine tools. Imports were up 2.9 percent, the first rise in two quarters, on increased smartphone imports. Jiji Press