Japan Gross Domestic Product

The growth estimate for the Japanese economy in the October/December quarter was 0.3% quarter on quarter, remaining unchanged from the July/September quarter.

Published quarterly by the Cabinet Office. Updated till the quarter of Oct-Dec 2016 (Second Preliminary estimate published on March 8th, 2017).

Recent data trend

As per the second preliminary estimates by Cabinet office, Real GDP grew by 0.3% QoQ during the fourth quarter of 2016, against the preliminary reading of 0.2%.

The latest revision was pushed higher by an upward revision to capital expenditure or business spending in that quarter. Private capital expenditure marked its highest level since the Jan-March quarter of 2014 and increased by 2% QoQ in the fourth quarter of 2016, an upgrade from the preliminary reading of 0.9%. Exports expanded by 2.6% in the Oct-Dec quarter, helped by increases in global demand. On the downside, private consumption did not record any growth(i.e. 0%) in the second revision and public capital expenditure or government investments contracted by 2.5%, as compared to the preliminary figure of 1.8%.

On an annualised basis, the growth in real GDP was revised up to 1.2% from a preliminary reading of 1% growth. The revised figure is lower than the forecasted estimate of 1.6% growth by a Reuters poll. Annual real GDP growth in 2016 was only 1% and is halfway of the government's 2% annual growth rate target. The Japanese economy has expanded since the past four quarters, however, the pace of expansion weakened in the latter half of the year.

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

                                            Second Preliminary estimate for Jan-Mar 2017: June 8th, 2017.

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