Japanese economic growth has been significantly downgraded

Photo by Adam Pretty/Getty Images

Japan’s economy didn’t grow as fast as first thought in the June quarter.

According to data released by the government today, real GDP grew by 0.6% in the three months to June, missing forecasts for an increase of 0.7%.

It was also well below the 1% pace that had been previously estimated by the government.

As a result of the quarterly revision, the seasonally-adjusted annual rate (SAAR) of growth was also sharply downgraded, falling to 2.5% from the preliminary estimate of 4%.

That was also below the 2.9% level that had been expected by economists.

Domestic demand added 0.9 percentage points (ppts) to quarterly growth, down from initial estimates of 1.3ppts, with private consumption and business investment contributing 0.8ppts and 0.1ppts respectively.

Business investment was a major factor behind the downgrade, having initially added 0.4ppts to growth.

Public demand added 0.4ppts to the quarterly figure, more than the preliminary estimate of 0.3ppts.

External demand lopped off 0.3ppts from growth, unchanged from initial estimates, as imports lifted and exports fell.

Source: Japan Cabinet Office

Despite the sharp downward revision, the increase extended Japan’s streak without recording a negative growth quarter to six, the longest stretch since mid-2006.

The Japanese yen is largely unmoved following the release of the report.

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