The Japanese economy grew faster than initially estimated in the fourth quarter as capital expenditure staged a quick recovery from a series of natural disasters in the previous quarter.
However, despite the upward revision to growth, economists are likely to temper their optimism on the outlook given a recent batch of disappointing data on exports and factory output and the economy expected to weaken due to the Sino-U.S. trade war.
Japan`s gross domestic product rose at an annualised rate of 1.9 percent in October-December, more than the initial estimate of a 1.4 percent annualised expansion and more than the median estimate for a 1.8 percent annualised increase, revised data from the Cabinet Office showed.
That followed a revised 2.4 percent annualised contraction in the third quarter, which was the biggest decline in more than four years.
Economists warn that capital expenditure and overall economic growth are likely to weaken in the first half of this year as exports dwindle and inventories pile up due to a slowdown in global trade.
The revised figure translates into a quarter-on-quarter expansion of 0.5 percent in real, price-adjusted terms. This is more than a preliminary reading of a 0.3 percent expansion and economists` median estimate of a 0.4 percent increase.
The capital expenditure component of GDP rose 2.7 percent in October-December from the previous quarter to mark the fastest expansion since January-March 2015. That compares with the median forecast for a 2.8 percent increase and a preliminary 2.4 percent expansion.
Private consumption, which accounts for roughly 60 percent of GDP, rose 0.4 percent in the fourth quarter, less than the preliminary estimate of a 0.6 percent increase.
Net exports - or exports minus imports - contributed minus 0.3 percentage point, unchanged from preliminary data.
Domestic demand added a revised 0.8 percentage point to GDP, more than a preliminary reading of a 0.6 percentage point contribution.
Separate data on Friday showed household spending rose 2.0 percent year-on-year in January, more than the median estimate for a 0.4 percent annual contraction, which may ease concerns about domestic demand.
Real wages in January rose 1.1 percent year-on-year in January, matching the same pace of growth in the previous month, the labour ministry said on Friday.
The United States last year imposed tariffs on $250 billion worth of goods imported from China, with Beijing hitting back with duties on $110 billion worth of American products, including soybeans and other commodities.
U.S. President Donald Trump has delayed tariffs on $200 billion worth of Chinese imports as negotiations to resolve the eight-month trade war show signs of progress.
Even if the two sides resolve their differences, the damage to global trade and Japan`s economy may take some time to repair with uncertainty about trade policies hurting sentiment and disrupting manufacturers` supply chains.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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