Sunday , 19 September 2021
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Japan cuts GDP growth for third quarter

Global Business Desk

TOKYO :Japan’s economy grew leJapanss than expected in the third quarter with a 0.3 percent expansion, revised data showed Thursday, a number that will likely fan fears that Tokyo’s growth plan has run out of steam.

The latest figures were lower than an initial estimate of 0.5 percent growth in the July-September period, largely due to a slump in corporate investment.

The weak reading translates into annualised growth of 1.3 percent, far below the median market forecast of an annualised 2.3 percent expansion.

Bu the government did offer a glimmer of hope, slightly revising up growth figures for the first and second quarter.

Japan’s economy contracted in the last three months of 2015, before bouncing back this year although the recovery has been wobbly.

That is putting Japanese officials under increasing pressure to deliver as more and more economists write off Prime Minister Shinzo Abe’s bid to cement a lasting recovery, dubbed Abenomics.

Data released late last month showed that Japan’s factory output ticked up in October, expanding for the third month in a row, but spending among Japanese households remains weak.

Meanwhile, inflation was also disappointing, with core consumer prices — which exclude volatile fresh food costs — falling 0.4 percent in October to extend their longest run of declines for five years, and putting the Bank of Japan’s 2.0 percent inflation target well out of reach.

Next week, Japan’s central bank will release its closely-watched Tankan business sentiment survey.

Abe came to office in late 2012 and launched a growth plan — a mix of massive monetary easing, government spending and red-tape slashing.

The plan sharply weakened the yen — fattening corporate profits — and set off a stock market rally that spurred hopes for a once-soaring economy caught in a deflationary spiral of falling prices and lacklustre growth.

But promises to cut through red tape have been slower, and his plan t

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