Japan’s economy grew an annualized 2.5 percent in the April-June period, a sharp downgrade from preliminary data, due mainly to a weaker-than-expected rise in capital spending, the government said Friday.
The revised figure on GDP in annual terms slightly undershot the average market consensus for 2.8 percent growth. Growth in private consumption, a key driver of the Japanese economy, was also revised downward to 0.8 percent from the initially estimated 0.9 percent, partly due to a decline in people dining out.
The expansion in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, corresponded to a 0.6 percent increase from the previous quarter.
The government said in a preliminary report released on Aug. 14 that the world’s third-largest economy grew an annualized 4.0 percent in real terms, or a real 1.0 percent from the previous quarter.
A government official said the sluggish corporate capital spending reflects data on Japanese firms released by the Finance Ministry last week.
Still, the revised data confirm that “the economy expanded for a sixth straight quarter,” the official said.
A run of six consecutive quarters of growth marked the longest such stretch since the period between January 2005 and June 2006.
The Cabinet Office says the outlook that the Japanese economy will continue a moderate recovery supported by domestic demand remains unchanged. The economy had long been supported by overseas demand.
But some private-sector economists questioned the government’s upbeat view.
Yoshimasa Maruyama, chief market economist at SMBC Nikko Securities Inc., said while the perception that the economy is on a moderate recovery remains intact, the revised data showed that the initially predicted figure of 4 percent growth “was too strong.”
“We cannot go as far as saying that the Japanese economy has now shifted to domesticdemand-driven growth and will now continue to grow (in that context),” Maruyama said.
The revised data on capital spending suggest that companies have yet to start becoming very active in business investment, he said, also predicting that the growth rate in consumption in the July-September period could fall or contract partly due to weather conditions.
Corporate capital spending rose 0.5 percent in the April-June period, down from 2.4 percent in preliminary data.
Exports fell 0.5 percent, unchanged from the preliminary data, while public investment swelled 6.0 percent, upgraded from a 5.1 percent rise, due to the impact of the government’s supplementary budget for fiscal 2016.
In nominal terms, or unadjusted for price changes, the economy logged an annualized 3.0 percent of growth, down from 4.6 percent reported earlier.