Research Institute Cuts Japan Q3 GDP to 2.47%

Japan’s economy is projected to have grown an annualized real 2.47 percent in the July to September quarter from a year earlier, an independent research institute said Wednesday, cutting its forecast from a 3.66 percent expansion.

Prime Minister Shinzo Abe has said he will study the second-quarter gross domestic product data, due out Monday, in deciding on whether to raise the consumption tax again next year, at a time when economic recovery has been slowing since the previous tax hike in April.

The Japan Center for Economic Research surveyed around 40 private-sector economists and announced their average forecast. The previous survey was conducted last month.

The tax hike on April 1, which raised the rate to 8 percent from 5 percent, has weighed on private consumption and slowed industrial output. Unstable summer weather also negatively affected consumer spending, which accounts for around 60 percent of the nation’s GDP, during the reporting quarter.

Other data have suggested consumer sentiment remains subdued for longer than thought earlier, causing some lawmakers and government officials to voice concern about the planned additional tax rise in October 2015 to 10 percent and call for its postponement to safeguard growth.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza