Japan fourth-quarter GDP shows economy still in recession, pick-up eyed
By Kaori Kaneko and Leika Kihara | February 14, 2013 11:28 AM EST
Japan's economy contracted for the third consecutive quarter in October-December, showing the country is struggling to escape from a mild recession and adding weight to the new government's push for radical policy steps to revive growth.
Gross domestic product (GDP) fell 0.1 percent in October-December from the previous quarter, compared with the median forecast of 0.1 percent expansion, according to a Reuters poll.
The data is unlikely to affect the outcome of a Bank of Japan policy meeting that ends later in the day.
Looking to kickstart the economy and end two decades of deflation, Prime Minister Shinzo Abe plans to combine the country's biggest stimulus spending since the financial crisis with aggressive monetary policy easing.
"Data show that overseas economies are recovering, so we expect Japan to return to growth in the first quarter. A weak yen will also help exporters," said Shuji Tonouchi, senior fixed income strategist at Mitsubishi UFJ Morgan Stanley Securities.
"The economy is still on the recovery track, and there is a stimulus package that will help from the spring. The Bank of Japan is also likely to continue monetary easing."
Economics Minister Akira Amari said while the economy was still showing some weakness, it was likely to resume moderate recovery helped by monetary easing, stimulus spending and an expected pick-up in global growth.
On an annualised basis, the economy contracted 0.4 percent, Cabinet Office data showed on Thursday. Economists had expected a 0.5 percent annualised increase.
Private consumption rose 0.4 percent from the previous quarter versus the median forecast for a 0.5 percent increase.
Capital expenditure fell 2.6 percent, more than the median estimate for a 1.8 percent decline, marking the fourth straight quarter of decline.
The Bank of Japan is expected to keep monetary policy steady and may revise up its assessment of the economy on Thursday, as the yen's recent declines and a pick-up in global demand offer some relief to the export-reliant economy.
Japan is expected to stress at a Group of 20 meeting this week that its push for aggressive monetary easing is intended to beat deflation and not designed to devalue the yen.
A $117 billion stimulus package is likely to pass parliament in coming weeks.
(Editing by Tomasz Janowski and John Mair)
Most Popular Slideshows
- In Photos, Typhoon Rammasun Blasts the Philippines
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Flight MH17 Attack: Russians Claim 'Putin A Terrorist,' Memorial at Dutch Embassy Overflows [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Google Nexus 8 Release Date Soon Along with 2 More HTC Android Tablets – Reports
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Sony PlayStation 4 Outsells a Resurgent Xbox One in June
- Killer Xiaomi Mi4 at $369 Likely to Come With 5.0-Inch Display, Snapdragon 801 Processor, 3GB RAM and More
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- NVIDIA Shield Gaming Tablet with Tegra K1 SoC Reported to be Released on July 29