TOKYO (Reuters) - Japan’s economy is expected to have slowed markedly in the third quarter as global recession risks hurt external demand while rising inflation and a weak yen’s impact on imported prices forced consumers to keep their wallets shut.
Gross domestic product (GDP) data due 0850 local time Nov 15 (2350 GMT Nov 14) will likely show the world’s No 3 economy grew at an annualized rate of 1.1 percent in July-September, sharply slower from the 3.5 percent expansion in the second quarter.
That would translate into quarter-on-quarter growth of 0.3 percent, according to a Reuters poll of 18 economists, also slacking off from the 0.9 percent pace in April-June.
The significant slowdown in part highlights the harsh impact on Japan from the yen’s slide to 32-year lows against the dollar, which has exacerbated the cost-of-living strains by further lifting the price of everything from fuel to food items.
Prime Minister Fumio Kishida’s government is stepping up support for households to try to ease the effects of cost-push inflation, with a 29 trillion yen ($196.09 billion) in extra spending in the budget.
“Unlike Western countries, Japan has not experienced pent-up demand while service consumption at hotels and restaurants remains stagnant,” despite easing coronavirus curbs, said Takeshi Minami, chief economist at Norinchukin Research Institute.
Capital expenditure that probably underpinned third quarter growth, is forecast to have risen 2.1 percent in July-September, versus 2 percent increase in the previous quarter, reflecting improved performance at big exporters and others thanks to the earnings boost from a weak yen.