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GDP growth likely slowed in second quarter: think tanks

JIJI

Private research institutes expect government data to show that Japan’s gross domestic product grew at a slower pace in the July-September quarter compared with the previous three months.

The average estimate of 13 think tanks surveyed on Japan’s quarter-on-quarter real GDP growth in the second quarter of fiscal 2013 stands at an annualized rate of 1.5 percent, weaker than the 3.8 percent growth posted in the April-June quarter. Japan’s economy has grown for three quarters straight.

The Cabinet Office is scheduled to announce its preliminary GDP data for July-September on Nov. 14.

The lower GDP growth projections reflect a deceleration in the tempo of expansion in private spending, which has been buoyed by improved consumer sentiment stemming from Prime Minister Shinzo Abe’s aggressive economic policy package, dubbed “Abenomics.”

In addition, exports are believed to have declined for the first time in three quarters, due to a slump in shipments to Southeast Asia.

Meanwhile, housing investment is seen to have posted the first increase in two quarters because of a surge in demand ahead of the first stage of the hike in the consumption tax, which will rise to 8 percent from 5 percent in April 2014. Corporate capital spending is also believed to have posted growth.

Public investment is projected to have increased sizably as the government begins to fully implement measures included in its fiscal 2012 supplementary budget.

In the October-December quarter, the economy will likely grow faster than in July-September, with private spending seen spurting in the run-up to the consumption tax hike, an official at the Japan Research Institute said.

  • peterwiseman

    Bust time