By Satoshi Sugiyama
TOKYO (Reuters) – Revised data for Japan's fourth-quarter gross domestic product is likely to show the economy avoided a technical recession thanks to better-than-expected spending by companies on plant and equipment, a Reuters poll showed on Friday.
GDP is expected to be revised upwards to show annual growth of 1.1% in October-December, according to the average forecast of 21 economists in the survey.
Preliminary figures released on February 15 suggested an unexpected 0.4% decline. The second straight quarter of decline met the definition of a technical recession for Japan – now the world's fourth-largest economy after Germany.
“The fear of a recession has disappeared,” said Atsushi Takeda, chief economist at the Itochu Research Institute.
Signs of economic growth, if materialized, could give the Bank of Japan more confidence to end negative interest rates as early as this month, paving the way for Japan's first rate hike since 2007. The central bank will meet for a two-day meeting to discuss its policy-setting meeting on March 18 and 19.
The survey said capital spending likely rose 2.5% in the fourth quarter, much better than the initial 0.1% decline.
However, private consumption, which accounts for about 60% of Japan's economy, is expected to be similarly weak in the revised data after a preliminary 0.2% decline, analysts said.
“It's hard to say that a virtuous cycle (between wage increases and inflation and consumer spending) has been achieved,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies, pointing to a prerequisite the BOJ set for lifting its ultra-loose easing policy has identified politics.
“It will be more like 'low economic growth with inflation,'” Sakai said.
The government will release the revised October-December data at 08:50 on Monday (23:50 GMT on Sunday).
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