Japan GDP above potential, but growth profile deteriorates

November 20, 2017

TOKYO - Japan’s GDP increased by +0.3% in Q3 of 2017, showing growth for a seventh consecutive quarter. But while the economy expanded above potential, says global asset manager Natixis, the growth profile deteriorated because the economy was largely dependent on external demand.

“Public investment, which has been an important growth engine, declined in Q3, and its leading indicator points to a further deceleration,” says Natixis. “Because of structurally weak wage growth and poor weather condition, private consumption as well as residential investment declined.

“Going forward, Japan is anticipated to become more sensitive to global economic development, keeping the BoJ accommodative on the monetary policy. The Government could also introduce a small stimulus package, should the global economy deteriorate.”  www.natixis.com (ATI).