Japan’s economy gets an upgrade in Q3 2016

Japan

Japan’s economy grew faster than first thought in the final three months of 2016.

Japan’s Cabinet Office announced that real GDP grew by 0.3% in the December quarter, higher than the 0.2% preliminary reading issued in February, Business Insider reported.

Despite the upgrade, it fell short of the 0.4% figure that had been eyed by markets.

The Cabinet Office also shared that private business investment grew by 2% for the quarter, up from the initial estimate of 0.9%, contributing 0.3 percentage points to GDP.

The quarterly increase was the fastest since the March quarter 2014, and will please the government given it is relying upon capital expenditure to underpin economic growth and improve productivity levels.

It also corresponded with recent strength in alternate manufacturing surveys, such as the Nikkei-IHS Markit PMI.

Outside of business investment, however, the news was a little less impressive.

Private consumption — the largest component within GDP — made no contribution to growth while a decline in business inventories sliced 0.2 percentage points from GDP, seeing domestic demand contribute just 0.1 percentage point to the quarterly figure.

The final 0.2 percentage points to the quarterly GDP figure came from trade as growth in export volumes outpaced those in imports.

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