Japan’s Economic Growth Below Estimates in Last Quarter

The Tokyo Stock Exchange, shown here in 2007 in Tokyo, Japan. Photo: Fg2 / Wikimedia Commons

TOKYO — Revised data show Japan’s economy expanded at a slower than hoped for 1.2 percent annual pace in the last quarter of 2016.

The figure released Wednesday was slightly higher than the preliminary estimate of 1.0 percent annual growth for the world’s No. 3 economy. It was below economists’ forecasts for growth of 1.4 percent or higher.

In quarterly terms, the economy expanded 0.3 percent in the October-December. The earlier estimate was 0.2 percent.

A slight increase in corporate investment appeared to be the main factor behind the slight upgrade. Private demand remained flat, and public spending fell slightly.


“In fact, the data underline that the large fiscal stimulus package revealed last July remains but a mirage,” Marcel Thieliant of Capital Economics said in a commentary. Public investment fell for the second straight quarter, he noted, and was the lowest it has been since the Prime Minister Shinzo Abe launched his “Abenomics” recovery program of public spending, lavish monetary stimulus and reforms.

There was no change in the estimate of 1.0 percent annual growth in 2016.

Abe has struggled to deliver on promises of sustained, stronger growth as frugal consumers and companies have opted to save rather than spend more.


Instead, corporations are investing heavily abroad, in markets that promise faster growth than in aging Japan, where the population is shrinking.

Balance of payments data show that foreign investment overseas, which has been climbing for many years, rose to a record high of 3.4 percent of Japan’s GDP in the past year.

Exports remain a major contributor to growth for Japan, and uncertainty over President Donald Trump’s trade policies remain a concern.