Japan fourth quarter GDP shows economy still in recession, pick-up eyed
By Kaori Kaneko and Leika Kihara | February 14, 2013 3:42 PM 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 (75.3 billion pounds) stimulus package is likely to pass parliament in coming weeks.
(Editing by Tomasz Janowski and John Mair)
Most Popular Slideshows
- Global Aviation Accidents: UN to Form Safety Task Force, Gov'ts Should Share Intelligence Info to Avert Future Incidents on Flying Over Warzones (PHOTOS)
- PageSix: Beyonce & Jay Z Union is Not About Love, All About Business & the Brand
- Kate Middleton & Prince William Taking a Time Off in August Amidst Miscarriage & Adopting a Child Claims
- Kate Middleton & Prince William Vacation Plans: Visit Prince Charles & Camilla Parker-Bowles
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
- Apple iPhone 6 Release Date Update: 6 Most Wanted Feature Upgrades for Next iPhone
- Moto X Android 4.4.4 KitKat Update Guide: Schedule and How to Install
- Twin Malaysia Airlines MH370, MH17 Aviation Disasters Create Phobia Among Travellers
- HTC One M8 Windows Phone to Launch for Verizon; Release Date, Price, Five Fresh Features to Anticipate for New Smartphone
- OnePlus One vs. Moto X+1 – Early Specifications, Release Date and Price Faceoff
- Galaxy Note 4 Release Date Ahead of iPhone 6 Sept 2014 Debut; Specced-Up but Remains Plastic-Wrapped – Reports
- LG G2 Android 4.4.4 KitKat Guide: When to Hit Your Region and How to Install