Published quarterly by the Cabinet Office. Updated till the quarter of Jul-Sep 2015 (Second Preliminary estimate published on December 08, 2015).
Recent data trend
According to the second preliminary GDP estimate by Cabinet Office, the Japanese economy grew by 0.3% quarter on quarter in the July-September quarter, an upward revision from the initial estimate of -0.2% quarter on quarter decline. Private capital expenditure and private inventory investment were the two major sources of the upward revision.
The upward revision must be a relief for policy makers. With the revision, the Japanese economy was no longer in recession in 2015. Instead, 2015 would be an "OK" year, with the overall growth rate of 0.6-0.9%, depending on the outcome of the October-December quarter. While a growth rate of less than 1% should not be a satisfying result for a government targeting a 2% growth, escaping the stamp of recession would let policy makers more easily avoid the criticism of having mismanaged their policy. With the upward revision in the GDP estimate, the BoJ is even more unlikely to decide to ease their policy any time soon.
They have some reasons to hold back from adding further stimulus. The near term economic outlook is rather positive. We expect the growth in Japan to accelerate to 1.7% growth in 2016, on the back of improving domestic demand. The fundamentals are encouraging for Japanese consumers and we also expect Japanese corporate managers to gradually loosen on the capital outlays. While we have a strong doubt that the growth could be sustained into 2017, the economic outlook for Japan looks positive in the short term.
Gross Domestic Product (GDP) measures the market value of economic activities within a country, in our case, Japan. It includes some non-market services such as government services and imputed rents for owner-occupied dwellings, but it generally does not include unpaid activities such as volunteer and unpaid housework.
Japan’s GDP was 475.7 trillion yen in 2012. Using the average USD/JPY rate of 79.8 for 2012, it translates into 5.96 trillion USD, placing Japan as the third largest economy after U.S. (15.68 trillion USD) and China (8.22 trillion USD). Germany was the 4th largest with a GDP of 3.4 trillion USD. In Japan, private consumption accounts for 60.9% of its GDP, followed by government consumption (20.5%) and private non-residential investment (13.4%). Exports and imports account for 14.7% and 16.6% respectively.
Japan’s GDP has been on a declining trend since 1997 when it was 523.5 trillion yen. The decline is due to low real growth (0.6% per year on average between 1997-2012) and outright deflation (-1.2% per year on average between 1997-2012).
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Nominal GDP
Real GDP-Annual data
Nominal GDP-Annual data
Source: Cabinet Office, JMA.
Source: Cabinet Office, JMA.
The Next Release Date: Preliminary estimate for Oct-Dec 2015: February 15th, 2016.
Revised estimate for Oct-Dec 2015: March 8th, 2016.
