Japan’s second-quarter economic growth was slightly lower than initially reported, attributed to reduced figures in corporate and household spending, indicating a potentially challenging second half for consumption and the central bank’s interest rate hike strategy.
Revised data from the Cabinet Office revealed that Japan’s gross domestic product grew by an annualized rate of 2.9% in the April-June quarter, below economists’ median forecast of 3.2% and the preliminary estimate of 3.1%.
Capital expenditure was revised from a 0.9% increase to 0.8%, while private consumption, a significant driver of the Japanese economy, saw growth of 0.9% compared to the initial 1.0% estimation.
Although there are positive indicators in wages and personal and corporate spending, analysts caution against external risks such as potential slowdowns in the U.S. and Chinese economies.
Recent data showing weaker July household spending has also raised concerns about a loss of momentum in the current quarter.
While the revised GDP figures are not expected to significantly impact the Bank of Japan’s immediate decisions, uncertainties surrounding spending trends have clouded the path to the central bank’s rate hikes.
