By Kantaro Komiya
TOKYO (Reuters) – Japan’s economy likely grew more than initially estimated in the first three months of this year, thanks to solid investments by manufacturers, a Reuters poll showed.
Revised real gross domestic product (GDP) data is expected to show the world’s third-largest economy expanded at an annualised rate of 1.9% in the first quarter, higher than a preliminary reading of 1.6%, according to the poll of 18 economists.
A forecast 1.3% increase in capital expenditure, larger than the provisional estimate for a 0.9% rise, would be the main driver of upgrade, analysts said. Ministry of Finance data on Thursday showed Japanese firms ramped up spending on plant and equipment in January-March at the fastest rate since 2015.
“Manufacturers’ investments are growing vigorously on top of non-manufacturers’ spending, suggesting that the global manufacturing downturn has not brought big impacts to Japan,” SMBC Nikko Securities analysts wrote in a note.
“While we can’t characterise January-March as the exit period from stagnation, the data raises hope for the fiscal year 2023” which started in April, they added.
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Japan’s economy emerged from recession in the first quarter as a post-COVID consumption rebound offset global headwinds, shoring up hopes for a sustained recovery.
Economists also projected Japan’s current account balance stayed in black in April thanks to a smaller services deficit as tourists flocked back to the country. The median estimate for April current account stands at a surplus of 1.6638 trillion yen ($12 billion).
Household spending in April was likely down 2.3% from a year earlier but up 0.6% from a month before, the poll also showed.
The government will release the revised first-quarter GDP figures and the current account balance data at 8:50 a.m. on June 8 (2350 GMT, June 7). Household spending data is due at 8:30 a.m. on June 6 (2330 GMT, June 5).
($1 = 138.74 yen)
(Reporting by Kantaro Komiya; Editing by Kim Coghill)