Japan’s Q4 GDP forecast to revise up, wholesale price gains cloud outlook – Reuters Poll

By Kantaro Komiya

TOKYO (Reuters) – Japan’s financial system expanded greater than initially anticipated within the remaining quarter of 2021, however rising enter costs possible stored wholesale inflation close to a file in February in an indication of rising dangers to the delicate restoration, a Reuters ballot confirmed.

Revised gross home product (GDP) knowledge will possible present the world’s third-largest financial system elevated at an annualised 5.6% in October to December of final yr, barely larger than a preliminary studying of 5.4% development, based on the ballot of 17 economists.

The ballot confirmed the improve is essentially due to an anticipated 0.7% enhance in capital expenditures, bigger than the preliminary 0.4% rise, reflecting the sturdy fourth-quarter enterprise spending knowledge in a Ministry of Finance survey this week.

But the sturdy development determine doesn’t counsel Japan’s full restoration from the blows of the COVID-19 pandemic, based on analysts.

“Even after the upward revision, the dimensions of GDP will stay under that of pre-pandemic ranges in October-December 2019,” mentioned Shinichiro Kobayashi, principal economist at Mitsubishi UFJ Analysis and Consulting.

With COVID curbs hammering consumption and the Ukraine disaster clouding the outlook, many analysts count on Japan’s financial development to gradual and even contract within the present quarter.

The rapid hit from the warfare in Ukraine will possible come by way of a spike in gas and commodity costs, analysts say.

Wholesale costs possible rose 8.7% in February from a yr earlier, the ballot confirmed, hovering close to a file reached in November on features in uncooked materials and power prices.

Separate knowledge will present family spending possible rose 3.6% in January from a yr earlier, marking the primary enhance in six months, the ballot confirmed.

The federal government will launch the revised fourth-quarter GDP knowledge at 8:50 a.m. on March 9 (2350 GMT, March 8) and family spending knowledge at 8:30 a.m. on March 11 (2330 GMT, March 10).

The Financial institution of Japan will launch the wholesale inflation knowledge at 8:50 a.m. on March 10 (2350 GMT, March 9).

(Reporting by Kantaro Komiya; Enhancing by Christian Schmollinger)

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