TOKYO – Japan’s economy likely grew for a fourth straight quarter in July-September helped by solid domestic demand as consumers rushed to beat a sales tax hike, a Reuters poll found on Wednesday.
But the pace of growth was seen slowing from the second quarter as a strong typhoon and rainy weather countered strong domestic spending and weak external demand hurt exports.
Analysts expect the economy could shrink in the fourth quarter as the effect of the sales tax hike filters through.
Gross domestic product (GDP) is expected to have risen an annualized 0.8 percent in July-September after a downwardly revised 1.3 percent in the second quarter, the poll of 15 economists showed.
That would translate into 0.2 percent growth on a quarter-on-quarter basis, compared with a revised 0.3 percent in the April-June quarter, according to the poll.
“Private consumption helped the economy but economic growth was likely limited as exports remained weak and firms reined in their factory output operation,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
Private consumption, which accounts for about 60 percent of GDP, was seen rising 0.6 percent for the quarter, the same rate of growth as in the second quarter, the poll showed.
Capital spending likely rose 0.9 percent in the third quarter after a 0.2 percent gain in April-June, it found.
“Firms’ capital spending stance has become slightly cautious on weak exports and factory output, but spending demand for labour-saving and automation due to a labour shortage remained strong,” said Yasunari Tanaka, researcher at Mitsubishi Research Institute.
External demand – or exports minus imports – likely subtracted 0.1 percentage point from growth in the third quarter, the poll showed. In the second quarter, it subtracted 0.3 percentage point from growth.
Consumer confidence in October improved for the first time in 23 months but the level remained low, data by the Cabinet office showed last month.– Reuters