©Reuters. File photo: Factories lined up at Osaka Port in western Japan on October 23, 2017. Photographed on October 23, 2017.REUTERS/Thomas White/File Photo
Written by Satoshi Sugiyama
TOKYO (Reuters) – Japan’s revised fourth-quarter gross domestic product data could show the economy avoided a technological recession thanks to higher-than-expected corporate spending on plant and equipment. high, a Reuters poll showed on Friday.
According to the median forecast of 21 economists who participated in the survey, GDP is expected to expand at an annual rate of 1.1% in the October-December period.
Preliminary figures released on February 15 showed an unexpected decline of 0.4%. Two consecutive quarters of economic contraction met the definition of a technical recession for Japan, currently the world’s fourth-largest economy after Germany.
Atsushi Takeda, chief economist at the ITOCHU Research Institute, said, “Concerns about the economy going into recession have disappeared.”
Evidence of economic growth could give the Bank of Japan more confidence to lift negative interest rates as early as this month, paving the way for its first interest rate hike since 2007. The central bank is scheduled to hold a two-day policy meeting. -Meetings set for March 18th and 19th.
Capital spending likely rose 2.5% in the fourth quarter, much better than the 0.1% decline initially expected, according to the poll.
However, analysts say personal consumption, which accounts for about 60% of Japan’s economy, is expected to remain sluggish in the revised data, following a preliminary estimate of a 0.2% decline.
Saisuke Sakai, a senior economist at Mizuho Research & Technologies, said, “It’s hard to say that a virtuous cycle (between wage increases, inflation, and personal consumption) has been achieved,” which the Bank of Japan has cited as a precondition for super monetary easing. I mentioned that there is. policy.
Mr. Sakai said, “The situation will be similar to “low growth under inflation.”
The government will release revised October-December statistics at 8:50 a.m. Monday (2:50 p.m. Japan time on Sunday).
