TOKYO :Japan’s economy expanded in the October-December quarter at a slower pace than initially reported, government data showed on Tuesday, weighed by weaker consumption but still likely supporting the case for further interest rate hikes.
Gross domestic product expanded an annualised 2.2 per cent in the three months to December, the Cabinet Office’s revised data showed, slower than the 2.8 per cent growth in the initial estimate and economists’ median forecast.
The revised numbers translate into a quarter-on-quarter expansion of 0.6 per cent in price-adjusted terms, compared with a 0.7 per cent growth issued on February 17.
The Bank of Japan raised short-term interest rates in January to their highest in 17 years, and growth momentum in the world’s fourth-largest economy will be among key factors determining how fast it continues to tighten policy.
The capital expenditure component of GDP, a barometer of private demand-led strength, rose 0.6 per cent in the fourth quarter, revised up from a 0.5 per cent expansion in the initial estimate. Economists had estimated a 0.3 per cent rise.
Private consumption, which accounts for more than half of economic activity, was unchanged versus the preliminary reading of 0.1 per cent uptick.
External demand, or exports minus imports, contributed 0.7 of a percentage point to growth, unchanged from the preliminary reading. Domestic demand shaved 0.2 of percentage point off.
Separate data from the internal affairs ministry showed household spending rose 0.8 per cent in January year-on-year, well below the market estimate for a 3.6 per cent jump based on a Reuters poll.
On a seasonally adjusted, month-on-month basis, spending dropped 4.5 per cent, bigger than an estimated 1.9 per cent decline.
