TOKYO: A private research institute has investigated that Japan increased GDP by 2.2% per annum in Oct-Dec quarter. According to the report, however, the economic recovery is weak as the annualized figure was significantly below the average 3.5 per cent growth forecast.
The nation’s gross domestic product in the October-December quarter increased 0.6 per cent from the previous quarter in price-adjusted real terms, marking the first positive growth in three quarters as well as the first since the consumption tax hike in April last year, the Cabinet Office said in a preliminary report on Monday. Consumer spending, which accounts for about 60 per cent of the GDP, increased 0.3 per cent, marking positive growth for the second consecutive quarter, but remained unchanged from the July-September quarter. This indicates that the recovery in consumer spending is still weak.
“The growth in consumer spending is not as much as we hoped,” Chief Cabinet Secretary Yoshihide Suga said at a press conference on Monday. “Consumer sentiment remains low because household income cannot keep pace with price increases [due to such factors as the consumption tax hike].” Households increased spending on home appliances and other durable goods in contrast to the drop in demand following a spending spree just before the consumption tax hike. However, spending on com-modities, including clothes and cosmetics, was sluggish.
Capital investment rose 0.1 per cent, the first positive growth in three quarters. Such investment recovered among computer and other information technology industries, but fell for plant machinery and the construction sector. Housing investment dropped 1.2 per cent largely due to a lingering decline in reaction to the consumption tax hike. Public investment rose 0.6 per cent, recording positive growth for the third straight quarter. Meanwhile, net exports increased 0.2 per cent. Exports rose 2.7 per cent due to an increase in exports to the United States and Asian countries. An increase in spending by foreign tourists also pushed up the figure. In nominal terms, the GDP in the October-December quarter rose 1.1 per cent from the previous quarter. On an annualized basis, it increased 4.5 per cent.
