Japan posts weaker recovery
By Tomoko A. Hosaka |
March 12, 2010, Friday
|
Print Edition
Print Edition
JAPAN'S economic growth was weaker than first estimated in the fourth quarter, underscoring a patchy recovery in the world's No. 2 economy.
Gross domestic product expanded at an annual pace of 3.8 percent in the October-December quarter, the government said yesterday, revised down from a preliminary forecast of 4.6 last month. The new figure was generally in line with market forecasts.
Slightly lower business spending and a big drop in inventories, which suggests companies are letting stocks run down in anticipation of weak demand, drove the GDP revision.
The new calculations by the Cabinet Office revealed that companies spent slightly less than expected on factories and equipment. Capital expenditure expanded by 0.9 percent, down from an initial reading of 1 percent.
The results show Japanese companies remain conservative with spending, focusing instead on cutting costs and recovering profits despite growth in China and Asia.
Private inventory dragged GDP, which measures the total value of a nation's goods and services, lower by 0.1 percentage point. The government had estimated in February that inventory pushed up GDP by 0.1 point.
The revision, however, does not change the overall picture of Japan's economy - still shaky but probably strong enough to avoid another recession.
Japan's economic growth is expected to slow this quarter amid deepening deflation, cuts in public works and the fading impact of stimulus measures.
But Goldman Sachs economist Chiwoong Lee said the economy should regain pace later this year with robust exports and increased consumption by families.
Gross domestic product expanded at an annual pace of 3.8 percent in the October-December quarter, the government said yesterday, revised down from a preliminary forecast of 4.6 last month. The new figure was generally in line with market forecasts.
Slightly lower business spending and a big drop in inventories, which suggests companies are letting stocks run down in anticipation of weak demand, drove the GDP revision.
The new calculations by the Cabinet Office revealed that companies spent slightly less than expected on factories and equipment. Capital expenditure expanded by 0.9 percent, down from an initial reading of 1 percent.
The results show Japanese companies remain conservative with spending, focusing instead on cutting costs and recovering profits despite growth in China and Asia.
Private inventory dragged GDP, which measures the total value of a nation's goods and services, lower by 0.1 percentage point. The government had estimated in February that inventory pushed up GDP by 0.1 point.
The revision, however, does not change the overall picture of Japan's economy - still shaky but probably strong enough to avoid another recession.
Japan's economic growth is expected to slow this quarter amid deepening deflation, cuts in public works and the fading impact of stimulus measures.
But Goldman Sachs economist Chiwoong Lee said the economy should regain pace later this year with robust exports and increased consumption by families.
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