Japan Gross Domestic Product

GDP data offers a glimmer of hope for Japan

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

Recent data trend

According to the revised estimate by the Cabinet Office, Japan's real GDP grew by 0.3% quarter on quarter (QoQ) in the January-March quarter. In the preliminary release published 3 weeks ago, the growth was estimated to be 0.5% QoQ. 

The downward revision was mainly due to the lower contribution from inventory investment. The contribution from private inventory investment to the overall GDP growth was revised down by 0.2% points, matching the size of the downward revision in the overall GDP growth for the quarter. Private consumption growth was also marginally revised down to 0.3% QoQ from initial estimate of 0.4% QoQ. On the other hand, capital investment growth was revised up to 0.6% QoQ from 0.2% QoQ.

In our view, the downward revision in the GDP growth rate is not necessarily a negative news though. A reduction in inventory may spur future production to replenish the inventory.

The January-March quarter marked the 5th consecutive quarter of positive growth for Japan. Judging from indicator releases for April such as real consumption index released by the BoJ on June 7, Japan may have also grown positively in the April-June quarter. Such a streak of positive growth gives fresh hope for Japan to achieve its reflation goal. Judging from the current output gap level, Japan requires a few more years of above-potential growth for the output gap to reach a level consistent with 2% inflation.

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 Apr-June 2017: August 14th, 2017.

                                            Second Preliminary estimate for Apr-June 2017: September 8th, 2017.

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