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Japan first-quarter GDP growth expected to be paltry on soft consumer spending

Published 05/09/2016, 01:38 AM
Updated 05/09/2016, 01:40 AM
© Reuters. File photo shows a shop clerk carrying a box of shoes under sale signboards at a shoes retail store at a shopping district in Tokyo

By Kaori Kaneko

TOKYO (Reuters) - Japan's economy is expected to have barely grown in the first quarter, a Reuters poll showed on Monday, as stagnant consumer spending and wobbly financial markets keep expectations for more government stimulus measures alive.

Gross domestic product (GDP) was seen to have expanded at an annualized rate of 0.2 percent in January-March, according to the poll of 19 analysts, after a 1.1 percent contraction in October-December.

That would translate into a quarterly expansion of 0.1 percent, the poll showed, following a 0.3 percent decline in the final quarter last year.

Analysts say the slight growth was due to the extra day in the quarter from the leap year and that the economy may have even contracted without that factor.

"The GDP data will probably show the actual economy lacks strength," said Takumi Tsunoda, senior economist at Shinkin Central Bank.

"There are signs of a pickup in exports and corporations keeping firm capital spending plans, which support the economy, while private spending stays at a standstill."

The poll found private consumption, which accounts for roughly 60 percent of GDP, likely grew 0.2 percent in the first quarter after a 0.9 percent fall in the previous quarter.

Capital spending fell 0.8 percent after rising 1.5 percent and external demand contributed 0.1 of a percent point to growth in the first quarter, according to the poll.

The Cabinet Office will announce GDP data on May 18 at 8:50 a.m.(2350 GMT, May 17).

The poll of analysts also found the current account balance, which will be published on May 12, is expected to post a surplus of 3.0 trillion yen ($27.95 billion) in March, the largest surplus since March 2007.

© Reuters. File photo shows a shop clerk carrying a box of shoes under sale signboards at a shoes retail store at a shopping district in Tokyo

Slides in imports largely due to oil price falls and income from investments overseas at Japan's fiscal year-end likely bolstered the balance of payment, marking 21 straight months of surplus.

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