Japan has revised its third-quarter gross domestic product figures, showing that the country’s economy actually grew in the July to September period and has not entered recession mode as previously believed.
The country’s economy grew an annualized 1 percent over the three months, the Cabinet Office said Tuesday. An earlier estimate had the economy contracting by 0.8 percent after shrinking in the first quarter. Two consecutive quarterly contractions of GDP is considered a technical recession.
The government also revised private consumption figures. Consumption rose 0.4 percent in the quarter compared to an earlier estimate of 0.5 percent.
Several Japanese retailers have been performing well recently, thanks in part to strong tourist flows from Asia. Fast Retailing and department store operators likeIsetan Mitsukoshi Holdings saw higher sales in October. LVMH Moet Hennessy Louis Vuitton said it saw very strong double-digit sales growth in Japan in the third quarter. Hermes also reported a double-digit jump in third-quarter sales in Japan.
Nomura economists said they have revised upward their GDP estimates for 2015. They are now predicting real GDP growth of 1.1 percent year-on-year, up from a previous forecast of 0.9 percent growth. They said they made the change mainly because of the upward revision of the third-quarter figures. They explained that they expect a slight economic slowdown in the fourth quarter of 2015, but growing momentum thereafter.
“Looking ahead, we expect real GDP growth to slow to +0.6 percent quarter-on-quarter annualized in 2015 Q4,” they said “However, we expect real GDP growth to remain at 1.5 to 2.0 percent quarter-on-quarter annualized from 2016 Q1 onwards, as inventory corrections and the household income climate improve alongside corporate earnings.”