The government on Thursday significantly downgraded economic growth in the January-March quarter from preliminary data, due largely to a fall in crude oil inventories.
The expansion in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, was revised to an annualized 1.0 percent growth from the previously estimated 2.2 percent expansion, the Cabinet Office said.
The revised figure undershot the market consensus for 2.6 percent growth.
It corresponds to a 0.3 percent increase from the previous quarter in the world’s third-largest economy, down from 0.5 percent growth in a preliminary report released May 18.
Still, the latest data confirmed the economy expanded for a fifth straight quarter, the longest stretch since six quarters of continued growth between January 2005 and June 2006.
Oil wholesalers cut stockpiles more than initially thought, likely due to a rise in import prices and a fall in refining capacity as some equipment was stopped for maintenance. Prices have risen as oil-producing countries slash output to reduce a global glut.
“Inventory balances are at the lowest level in years and raw material stocks were downgraded considerably” in the latest data, a government official said.
Analysts viewed the data with optimism, with Junichi Makino, chief economist at SMBC Nikko Securities, saying “the decrease in inventory investment signals progress in inventory adjustment, which is an improvement in substance.”
“On balance, this result confirms our main scenario that the Japanese economy is on a moderate growth track,” said Satoshi Osanai, senior economist at the Daiwa Institute of Research.
Government officials attributed the large fluctuation in preliminary and revised data to having few corporate statistics prior to the initial report. The GDP revision relies heavily on a Finance Ministry survey of companies released after the initial report.
Corporate spending rose 0.6 percent quarter on quarter, up from the initial tally of 0.2 percent growth, supported by investments in the services and construction sectors.
Private consumption, accounting for around 60 percent of the GDP, rose 0.3 percent, downgraded from the 0.4 percent rise in the preliminary data. The change reflected softer spending than initially reported on cars, hotels and other accommodation.
Total exports of goods and services were unchanged at 2.1 percent growth, while public investment was nearly flat with a 0.1 percent contraction.
In nominal terms, or unadjusted for price changes, the economy shrank an annualized 1.2 percent, the biggest contraction since 2.2 percent registered in the July-September period of 2012. It compared with a preliminary reading of a 0.1 percent shrinkage.
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