Japan’s economy experienced 0.9% growth in the third quarter at an annualised rate of 3.9%, according to the Japanese Cabinet Office, beating the Kyodo News Agency’s average market forecast of a 0.6% increase.
The best quarterly growth since the first quarter was chiefly the result of a 1.1% quarterly increase in consumer spending, the Cabinet Office said, as consumers scrambled to take advantage of government stimulus programmes before they end.
Exports contributed nothing to the growth, which bodes ill for the fourth quarter, following the yen hitting a 15-year high against the dollar in mid September.
The spike in consumer spending was caused by sales of government-subsidised fuel-efficient vehicles and cigarettes, which face an imminent tobacco tax rise. (article continues below)
Commenting on the growth and Japan’s immediate outlook, Junko Nishioka, the chief economist at RBS Securities Japan, says the growth suggests “a marked slowdown in the final quarter as stimulus-driven consumption loses steam and export growth slows.”
According to Reuters and Bloomberg, Banri Kaieda, the economics minister, stoked doubts for the final quarter, saying in a statement issued after the results release, “Japan’s economy is at a standstill.”