Japan Gross Domestic Product

The growth estimate for the Japanese economy in the October/December quarter was 0.2% quarter on quarter, slightly slower than the 0.3% growth in the July/September quarter.

Published quarterly by the Cabinet Office. Updated till the quarter of Oct-Dec 2016 (First Preliminary estimate published on February 13th, 2017).

Recent data trend

As per the first preliminary estimates by Cabinet office, the Real GDP grew by 0.2% QoQ during the fourth quarter of 2016. This marked the expansion in GDP for the fourth straight quarter. But, the GDP growth during the Oct-Dec 2016 quarter was slightly slower than the 0.3% QoQ growth duing July-September quarter.

The growth in real GDP was helped by private capital expenditure and exports.The private investment bounced back to a 0.9% QoQ expansion during Oct-Dec quarter from a 0.3% QoQ contraction during the July-September quarter.A weaker yen and an increase in global demand helped push exports which grew remarkably by 2.6% QoQ in the last three months of 2016. On the downside, private consumption continued to remain weak with no growth during the December 2016 quarter. This might be a cause for concern as despite the monetary and fiscal stimulus in the economy the demand continues to remain subdued.
 
On an annualised basis, the real GDP grew by 1% in 2016, lower than 1.2% growth in 2015. This was below the forecast of 1.1% by reuters poll. The real GDP growth in 2016 managed to reach only halfway of government's 2% annual growth rate target. 
 
For Japan's economic growth to reach the target, household spending needs to pick up. Household spending account for almost 56% of nominal GDP. Sticky low wages in Japan, despite the full employment status, seems to explain low levels of spending.
 

Brief overview of "GDP"

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).

For more information, visit the official government page

Nominal GDP

Real GDP-Annual data

Nominal GDP-Annual data

Source: Cabinet Office, JMA.

Source: Cabinet Office, JMA.

The Next Release Date: Second Preliminary estimate for Oct-Dec 2016: March 8th, 2017.

                                            First Preliminary estimate for Jan-Mar 2017: May 18th, 2017.

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