TOKYO (Reuters) -Japan’s financial rebound was softer than preliminary estimates within the last quarter of 2021, revised information confirmed on Wednesday, because the pickup seen in shopper and enterprise spending was weaker than first reported.
The downwardly revised development is unhealthy information for policymakers tasked with retaining the nation’s fragile restoration on monitor as a leap in commodity costs as a result of Ukraine disaster and chronic provide disruptions heighten financial uncertainty.
Revised gross home product (GDP) information launched by the Cupboard Workplace on Wednesday confirmed Japan expanded an annualised 4.6% in October-December. That was decrease than economists’ median forecast for a 5.6% achieve and the preliminary studying of 5.4% launched final month.
“This means that Japan’s financial restoration from the pandemic is weaker than that of Europe and the USA,” mentioned Takeshi Minami, chief economist at Norinchukin Analysis Institute.
On a quarter-on-quarter foundation, GDP expanded 1.1%, falling in need of the median market expectations for a 1.4% achieve.
The change was principally as a result of downgrade in non-public consumption, a authorities official advised a media briefing.
Personal consumption, which makes up greater than a half of Japan’s GDP, elevated 2.4% in October-December from the earlier quarter, revised down from an initially-estimated 2.7% achieve. Spending within the service sector, particularly, was downgraded to a 3.1% growth from an preliminary 3.5% improve.
Current business ministry information for December confirmed spending on companies similar to eating places and practice rides was weaker than the preliminary estimate based mostly on private-sector figures, the official mentioned.
“Personal consumption was possible fairly weak in January, resulting from delicate spending on capital items similar to vehicles and companies,” mentioned Minami, including recent uncertainty round Ukraine is cooling enterprise funding.
Within the fourth quarter, capital expenditure grew 0.3%, decrease than economists’ forecasts for a 0.7% achieve and a preliminary determine of a 0.4% advance.
Whereas information earlier this month confirmed strong fourth-quarter enterprise spending, the revised GDP figures mirrored weak point in objects similar to software program funding, the official mentioned.
Home demand as an entire contributed 0.9 of a proportion level to revised GDP figures, whereas internet exports added 0.2 of a proportion level.
Economists in a Reuters ballot final week forecast annualised development of 0.4% within the January-March quarter, slashing earlier projections given Omicron coronavirus variant infections and uncertainties brought on by the struggle in Ukraine.
Yusuke Shimoda, senior economist at Japan Analysis Institute, mentioned he was nonetheless anticipating development to return in optimistic within the first quarter.
“However we’re nonetheless in early March,” he added. “Additional draw back dangers can’t be dominated out relying on Russia’s actions.”
Reporting by Kantaro Komiya and Daniel Leussink; Enhancing by Sam Holmes