TOKYO : Japan’s economy likely returned to growth in the last quarter of 2022 as the country reopened to tourists, offsetting weakening corporate activity and exports amid darkening global conditions, a Reuters poll showed.
Signs of stronger momentum heading into 2023 could influence major companies and workers in Japan as they head into annual labour talks. Solid wage hikes are seen essential to the economy’s post-pandemic recovery and the Bank of Japan’s exit from its decade-long ultra-loose monetary policy.
The world’s third-largest economy likely grew at an annualised 2.0 per cent pace in October-December, following a 0.8 per cent contraction in July-September, according to the median forecast of 18 economists.
“Japan marked high growth backed by a recovery in services demand…even thought there were downside factors such as rising inflation and the slowing overseas economy,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.
Analysts expect 0.5 per cent growth in fourth-quarter private consumption, which accounts for more than half of Japan’s gross domestic product (GDP), driving up overall output.
External demand likely added 0.4 per cent point to GDP growth, given a surge in service exports after Japan relaxed border controls to tourists in mid-October.
By contrast, corporate capital expenditure was expected to have contracted for the first time in three quarters, declining 0.2 per cent from July-September, the poll showed.
Analysts said Japan’s growth will likely decelerate in the current quarter as faltering Western demand and inflation at four-decade highs weighs on business activity.
The government will release preliminary October-December GDP data at 8:50 a.m. on Feb. 14 (2350 GMT, Feb. 13).
Separate data due next week is expected to show Japan’s annual wholesale price inflation stayed elevated at 9.6 per cent in January.
The current account surplus was forecast to have decreased to 98.4 billion yen ($765.34 million) in December after a 1.8 trillion yen excess in the previous month. Household spending likely fell 0.2 per cent in December, dropping for a second straight month.
The government will release current account balance data at 8:50 a.m. on Feb. 8 (2350 GMT, Feb. 7) and household spending data at 8:30 a.m. on Feb. 7 (2330 GMT, Feb. 6). Wholesale inflation data is due at 8:50 a.m. on Feb. 10 (2350 GMT, Feb. 9).
($1 = 128.5700 yen)
