TOKYO (Reuters) – Japan’s strong economic growth in the final quarter of 2021 was downgraded in a revised estimate on Wednesday, while pressures from record COVID-19 infections and rising energy costs are heightening risks of a contraction this quarter.
The downwardly revised growth is bad news for policymakers tasked with keeping the country’s fragile recovery on track as a jump in commodity prices due to the Ukraine crisis and persistent supply disruptions heighten economic uncertainty.
Revised gross domestic product (GDP) data released by the Cabinet Office on Wednesday showed Japan expanded an annualised 4.6% in October-December. That was lower than economists’ median forecast for a 5.6% gain and the preliminary reading of 5.4% released last month.
On a quarter-on-quarter basis, GDP expanded 1.1%, falling short of the median market expectations for a 1.4% gain.
Private consumption, which makes up more than a half of Japan’s GDP, increased 2.4% in October-December from the previous quarter, revised down from an initially-estimated 2.7% gain.
Domestic demand as a whole contributed 0.9 of a percentage point to revised GDP figures, while net exports added 0.2 of a percentage point.
Economists in a Reuters poll last week forecast annualised growth of 0.4% in the January-March quarter, slashing their previous projections given rapid Omicron coronavirus variant infections and uncertainties caused by the war in Ukraine.
(Reporting by Kantaro Komiya; Editing by Sam Holmes)
