Six research institutes said Monday that robust capital spending data for the April-June period, released earlier in the day, will lead the government to revise upward Japan’s annualized economic growth rate for the quarter from a preliminary 2.6 percent to 3.0-4.0 percent.
The upward revision of gross domestic product growth is expected to encourage Prime Minister Shinzo Abe to go ahead with the planned rise in the consumption tax rate to 8 percent next April from the current 5 percent.
“The prime minister will make a decision in early October in view of various economic indicators” including the revised GDP data due out Sept. 9, economic and fiscal policy minister Akira Amari said in a speech in Fukuoka on Monday.
The indicators may also include the Bank of Japan’s quarterly business confidence survey to be released in September and employment data for August to be released Oct. 1.
Amari said earlier Abe may decide on whether to implement the sales tax rise before the Asia-Pacific Economic Cooperation forum summit starts on Oct. 7.
Although preliminary April-June GDP data included a decline in nonresidential investment, the Finance Ministry said Monday business investment in the quarter rose from a year earlier for the first time in three quarters.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.