Revised Japan Q4 GDP data to show economy likely avoided recession: Reuters poll

TOKYO : Revised data for Japan’s fourth-quarter obnoxious domestic product will seemingly indicate that the financial system avoided a technical recession thanks to companies’ stronger-than-expected spending on vegetation and tools, a Reuters poll confirmed on Friday.

October-December GDP is anticipated to be revised up to level an annualised expansion of 1.1 per cent, per the median forecast of 21 economists in the poll.

Preliminary figures released on Feb. 15 had pointed to an sudden drop of 0.4 per cent. The second consecutive quarter of contraction met the definition of a technical recession for Japan – now the area’s fourth-supreme financial system on the help of Germany.

“Fears of entering a recession maintain disappeared,” mentioned Atsushi Takeda, chief economist at Itochu Compare Institute.

Proof of enterprise growth, if realised, may per chance well per chance provide the Monetary institution of Japan with more self belief to forestall damaging curiosity rates as early as this month, paving the scheme for Japan’s first fee hike since 2007. The central monetary institution will meet for a two-day policy-setting meeting on March 18-19.

Capital expenditure potentially rose 2.5 per cent in the fourth quarter, severely larger than the preliminary studying of a 0.1 per cent decline, per the poll.

However, non-public consumption, which makes up about 60 per cent of Japan’s financial system, is anticipated to level a equally previous studying in the revised data after a preliminary 0.2 per cent fall, analysts mentioned.

“Or no longer it’s sophisticated to inform that a virtuous cycle (between wage magnify and inflation and user spending) has been performed,” mentioned Saisuke Sakai, senior economist at Mizuho Compare and Applied sciences, referring to a prerequisite the BOJ has identified to unwind its ultra-unfastened policy.

“Or no longer it will seemingly be more esteem ‘low financial growth below inflation’,” Sakai mentioned.

The authorities will release the revised October-December data at 08:50 a.m. on Monday (2350 GMT on Sunday).