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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