Pedestrians walk past an electronic board displaying various companies’ share prices, at a business district in Tokyo, Japan, Oct 31, 2023. REUTERS/Kim Kyung-Hoon/File photo
TOKYO – Japan’s economy likely shrank slightly less than initially estimated in July-September, reflecting an expected upward revision in private sector capital investment, a Reuters poll showed on Tuesday.
Revised real gross domestic product (GDP) data on Friday is expected to show Asia’s second-largest economy contracted at an annualized rate of 2 percent in the third quarter, roughly in line with a preliminary reading of 2.1 percent, according to the poll of 16 economists.
An upward revision in a capital expenditure forecast to a 0.5-percent decrease from the provisional estimate for a 0.6 percent fall, would contribute to the modest change, analysts said.
Ministry of Finance data last week showed Japanese firms increased capital expenditure in the third quarter from the same period the previous year, but it was smaller than an increase in the second quarter.
Analysts said uncertainties over the domestic and global outlook would remain.
“In the October-December period and beyond, high prices will continue to weigh on personal consumption, and the economic downturn in Europe and the U.S. will be a headwind for exports of goods,” Saisuke Sakai, senior economist at Mizuho Research and Technologies, wrote in a note.
Japan’s economy is facing headwinds, with high inflation taking a toll on household spending and slowing global demand, including in China, adding pressure on manufacturers.
The government will release the revised GDP data on Friday, Dec. 8 at 8:50 a.m. JST (Dec. 7 at 2350 GMT).