Japan’s real gross domestic product for the July to September period is believed to have risen at an annual rate of 18.4% from the previous quarter, posting the first growth in four quarters, according to 12 private think tanks’ estimates by Monday.
The average estimate by the think tanks suggested that the Japanese economy expanded at its fastest pace since comparable data became available in 1980.
The anticipated growth came after the economy contracted 28.1% between April and June amid the coronavirus epidemic, logging the worst performance since the end of World War II.
In that period, Japanese GDP came to ¥484 trillion, down ¥41 trillion quarter on quarter. The think tanks estimated that GDP rebounded by around ¥20 trillion from July to September, or only half of the April to June loss.
By GDP component, the think tanks projected that private consumption increased 4.6% between July and September, against the April to June fall of 7.9%, reflecting firm demand for durable consumer goods, partly thanks to ¥100,000 government cash handouts, while spending on travel, food and other services was slow to recover.
Growth in exports is estimated at 7.6%, with automotive shipments to the United States growing against a backdrop of economic reopening overseas.
Meanwhile, corporate capital expenditures are believed to have remained sluggish as corporate earnings were rapidly deteriorating.
A decline in housing investment is also expected, given that orders for houses dropped with the country in a state of emergency over the epidemic.
For the October to December period, the domestic economy’s recovery pace is likely to “slow significantly,” due to the worsening situation for employment and income, as well as a resurgence in coronavirus infections in Europe and the United States, an official from one of the think tanks said.
The Cabinet Office is scheduled to release the GDP data for July-September on Nov. 16.
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