News Room - Business/Economics

Posted on 09 Dec 2009

Japan cuts 3Q GDP growth estimate to 1.3%

Japan's economy in the third quarter grew sharply less than initial estimates as cautious companies decided to save, not spend.

 

Real gross domestic product expanded at an annual pace of 1.3 percent in the July-September period, the government said Wednesday, much lower than its preliminary figure of 4.8 percent provided last month.

 

The result corresponds to 0.3 percent growth from the previous quarter instead of the 1.2 percent reported initially.

 

The big downward revision stems largely from capital investment, which fell 2.8 percent from the previous quarter after the government incorporated additional data.

 

The Cabinet Office had estimated that companies increased spending by 1.6 percent.

 

The marked change in GDP figures adds to recent signs that Japan's economic recovery may be losing steam.

 

The world's second biggest economy faces intensifying deflation and a strong yen, on top of a still uncertain global outlook.

 

GDP, or the total value of the nation's goods and services, rose at a revised annual pace of 2.7 percent in the April-June period after posting a record decline in the first quarter.