TOKYO – The Japanese economy grew at a slower pace in the April-June quarter, not the surprisingly strong spurt indicated by an earlier estimate, according to revised government data Friday, although signs of a revival are holding up.
The Cabinet Office said the gross domestic product or GDP — the total value of a nation’s goods and services — grew at an annualized rate of 2.5 percent. That second preliminary reading is a dramatic adjustment from the first preliminary reading, released last month, of 4.0 percent growth.
Private sector investment for the quarter was lowered in the latest data from 2.4 percent to 0.5 percent.
Although less upbeat than the earlier numbers, data show the growth continues to hold up, shedding the doldrums of the decades of slowdown that dragged on the nation after the “bubble” economy burst in the 1990s.
Rob Carnell, chief economist at ING, says the revision didn’t come as a complete surprise because he had suspected that the initial reading was overly strong because of seasonal adjustment being done poorly.
“It’s still a respectable pace of growth without stoking inflation, which is an argument favoring a stable BoJ policy for the foreseeable future,” he said referring to the Bank of Japan, this nation’s central bank that has set extremely low interest rates for years.
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On a quarterly basis, the economy grew 0.6 percent, lowered from 1.0 percent in the earlier data, according to the latest day.
Prime Minister Shinzo Abe has been pushing his so-called “Abenomics” program, based on stopping deflation and loosening old-style regulations that have discouraged new and foreign businesses.
He has also pumped in considerable public spending to keep the growth going. Some critics say Abenomics has not helped the poor enough.
But he is credited with pushing measures relatively new for Japan, such as trying to encourage women’s participation in the workforce, to wrest the economy out of decades of stagnation.
Global growth, including a healthy economy in the U.S. and China, this nation’s major trading partners, are critical. Japan’s economy still relies heavily on exports.
A research report by Yuichiro Nagai and Yukito Funakubo of Barclays found that the latest revision did not alter their overall assessment that the economy remains on a growth track, headed to its seventh consecutive quarter of growth.
Private consumption and housing investment numbers have been slightly lowered, in addition to the major lowering of private sector investment data, but exports, consumer spending and industrial production are expected to stay strong in the current quarter, they said.
AP Business Writer Yuri Kageyama can be reached at https://twitter.com/yurikageyama
Her work can be found at https://www.apnews.com/search/yuri%20kageyama