TOKYO- Japan’s economy expanded at a slower-than-initially-reported pace in October-December, with firms tightening spending on plant and equipment as the coronavirus pandemic clouded their business plans.
The slower growth was mainly due to a sharper contraction in private inventories and capital expenditure expanding less than previously thought in the fourth quarter, even as exports remained solid.
Separate data showed household spending was hit by a much bigger annual drop in January than in the prior month, a sign the COVID-19 pandemic was keeping consumers cautious about shopping.
The economy grew an annualized 11.7 percent in October-December, weaker than the preliminary reading of 12.7 percent annualized growth to mark the second straight quarter of growth, Cabinet Office data showed Tuesday.
The reading, which was weaker than economists’ median forecast for a 12.8 percent gain, translates into a real quarter-on-quarter expansion of 2.8 percent from October-December, versus a preliminary 3.0 percent gain.
Capital spending grew 4.3 percent from the previous quarter, lower than a preliminary 4.5 percent rise, but outpacing the median forecast for a 4.1 percent increase.
Private inventories, including raw materials and manufactured products, subtracted 0.6 percentage point from revised gross domestic product growth (GDP), which was more than a negative preliminary contribution of 0.4 percentage point. – Reuters