Japan Q3 GDP growth seen slowing sharply as consumption, external demand drag: Reuters poll

TOKYO, Nov 6 : Japan's economy is expected to have expanded only marginally between July-September, as recoveries in capital spending were largely offset by slowdowns in private consumption and external demand, a Reuters poll showed on Friday.

• Real gross domestic product (GDP) likely grew an annualised 0.3 per cent in the third quarter, according to the median forecast of 16 economists, slowing from a 1.4 per cent expansion in April-June but remaining on track for a fourth straight quarterly increase.

• Without annualisation, the July-September growth rate was estimated at 0.1 per cent.

• Economic growth will be among factors considered by the Bank of Japan in deciding whether to raise interest rates further. Many analysts expect the next BOJ rate hike as soon as next month.

• Capital expenditure was seen growing 1.5 per cent, rebounding from the previous quarter's 0.9 per cent decline. In contrast, private consumption, which accounts for more than half of Japan's GDP, is expected to have declined 0.2 per cent, the first contraction in seven quarters.

• "Service consumption was firm in July-September ... but durable goods consumption contracted due to policy-related factors, while non-durable goods consumption was weak because of the negative impact of rising inflation," analysts at SMBC Nikko Securities said in a note.

• Net external demand, or exports minus imports, likely subtracted 0.4 per centage points from GDP growth, after adding 0.5 per centage points in the previous quarter. Analysts said external demand likely turned negative as imports rose, reflecting progress in alternative crude oil procurement.

• The government will release the preliminary third-quarter GDP data on November 16 at 8:50 a.m. (2350 GMT on November 15).