Japan’s economic growth below estimates in last quarter

“In fact, the data underline that the large fiscal stimulus package revealed last July remains but a mirage,” Marcel Thieliant of Capital Economics said in a commentary. Public investment fell for the second straight quarter, he noted, and was the lowest it has been since the Prime Minister Shinzo Abe launched his “Abenomics” recovery program of public spending, lavish monetary stimulus and reforms.

There was no change in the estimate of 1.0 per cent annual growth in 2016.

Abe has struggled to deliver on promises of sustained, stronger growth as frugal consumers and companies have opted to save rather than spend more.

Instead, corporations are investing heavily abroad, in markets that promise faster growth than in aging Japan, where the population is shrinking.

Balance of payments data show that foreign investment overseas, which has been climbing for many years, rose to a record high of 3.4 per cent of Japan’s GDP in the past year.

Exports remain a major contributor to growth for Japan, and uncertainty over President Donald Trump’s trade policies remain a concern.

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Cabinet Office of Japan: http://www.esri.cao.go.jp/jp/sna/data/data_list/sokuhou/gaiyou/pdf/main_1.pdf

Elaine Kurtenbach, The Associated Press

by Canadian Press

Japan’s economic growth below estimates in last quarter

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