economic times-Japan’s economy likely grew slightly in October-December, the first expansion in three quarters, a Reuters poll showed on Tuesday, with solid private consumption and post-quake reconstruction demand helping to pull the country out of a mild recession.
The pace of falls in the nation’s capital spending probably slowed down and the negative contribution of exports to the economy is expected to have eased in the last quarter, according to the poll.
Gross domestic product (GDP) is expected to have expanded 0.1 per cent in the final quarter last year from the previous quarter, the poll of 21 economists showed, following a 0.9 per cent contraction logged in July-September.
That would translate into an annualised increase of 0.5 per cent.
The gain in GDP would come after weak global demand sent the export-reliant economy to two straight quarterly contractions.
"Monthly economic indicators suggest the economy has already bottomed out and it is showing a recovery," said Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
Private consumption, which makes up about 60 per cent of the economy, probably rose 0.5 per cent in October-December, the poll showed, as cold weather boosted sales of winter clothing and heating appliances. Also, falls in auto sales after the end of government subsidies for fuel-efficient car purchases likely eased.
Capital spending is projected to have fallen 1.8 per cent in the last quarter from a 3.0 per cent drop in the third quarter last year, according to the poll.
"The movement of rebuilding homes in the disaster hit areas has been spreading in a wider area. Housing investment performed firmly," said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute, referring to construction after a devastating earthquake and tsunami in 2011.
Weak external demand probably shaved 0.1 per centage points off the quarter’s economy, compared from a 0.7 per centage points negative contribution in July-September.
Analysts forecast Japan’s economy will grow moderately this year, helped by a global economic rebound and Prime Minister Shinzo Abe’s aggressive monetary and fiscal policy.