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Japan’s GDP fell 0.3% in April-June Quarter: Revised Cabinet Office Statistics

September 10, 2007
By Ken Worsley


As was widely expected, the revised GDP statistics for the April-June quarter showed a decline. The Cabinet Office announced today that Japan’s GDP shrank 0.3% during the quarter, for an annualized rate of -1.2%.

Previously, a Nikkei survey of economists predicted a -0.2% quarterly and -0.7% annualized fall.

What happened? Although consumer spending was revised downward from a 0.4% gain to 0.3% (a fall that was predicted here), it was the decline in capital spending that really hurt the economy. After having announced a 1.2% increase in its preliminary results, the Cabinet Office bit the bullet and stated today that capital spending actually fell 1.2% during the April-June quarter.

Back on September 3, the Ministry of Finance announced that capital spending in the April-June quarter had fallen 4.9%, for the first fall in seventeen quarters.

With that announcement, the April-June quarter became the first period showing a fall since July-September 2006, when GDP shrank by 0.1%.

Will capital spending pick up again? As the Ministry of Finance’s report showed, it was small and medium size firms that dragged down capital spending in the April-June quarter. We already know that consumers weren’t spending in July due to inclement weather, and we’re forced to wonder if small businesses might have followed suit…especially in August.

Filed Under Cabinet Office, Economic Reports, GDP 

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Comments

One Response to “Japan’s GDP fell 0.3% in April-June Quarter: Revised Cabinet Office Statistics”

  1. BOJ Holds Rates Steady, as Expected : Japan Economy News & Blog on December 2nd, 2007 11:20 pm

    […] “Japan’s economy is expanding moderately.” This, of course, is in the face of GDP having been down 0.3% in the April-June quarter. Generally, though, the BOJ’s statement seems valid, as other economic indicators seem to […]

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