The Illusion Of Japanese GDP Growth

Japanese GDP came in at an eye-popping 4.6% annualized rate for the fourth quarter of 2009, but the number could be meaningless.

That’s because, previously, annualized GDP growth was initially reported as 4.8% for the third quarter of 2009, only to be completely revised down to nothing.


Now it appears that 4.8% growth never happened.

Tokyo has come under increasing pressure to address wild variations in its readings of gross domestic product: In the third quarter last year, the government initially said the economy had grown a robust 4.8 per cent, only to revise that rate down to reflect no growth or decline. The latest numbers, the government says, have been adjusted for more accuracy.
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Thus one can have little faith in the fourth quarter GDP number given past revisions. Also, it should be noted that Japanese nominal GDP only rose at a 0.9% annualized basis during the fourth quarter. This means that most of the apparent growth was the result of a deflation adjustment, which is an easy item to revise away upon future revisions for the 4Q data set. Here’s the full Japanese GDP release below, from here.

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