According to the latest data officially released by the Japanese government on Friday, Japan’s economy achieved a moderate quarter-on-quarter growth of 0.9% in the critical July-September period. However, behind this positive result, there are concerns that the pace of growth has slowed compared to the previous quarter due to continued weakness in capital spending.
This mild slowdown in economic growth not only reflects insufficient momentum on the current path of economic recovery but also highlights the lack of a comprehensive and steady recovery in domestic demand. More worrisome is the growing risk of a slowdown in the U.S. economy, coupled with further weakness in China’s economy, which casts a shadow over the global economic outlook. These complex and shifting international economic factors will undoubtedly present more severe challenges and pressures on Japan’s future export prospects.
The latest data shows that Japan’s GDP growth momentum was strong, surpassing the market’s expected 0.7% and achieving a more impressive growth rate. Additionally, the previous quarter’s GDP growth rate, after careful revision, was confirmed to be a solid 2.2%.
The economic growth rate for this quarter was 0.2%, which aligns with estimates from a Reuters survey of economists, further enhancing the credibility of the data.
Private consumption, a critical component of economic activity accounting for more than half of the total economy, showed a remarkable growth rate of 0.9% this quarter, far exceeding the market’s initial expectation of 0.2%. This provides strong momentum for economic recovery.
Compared to the previously revised 0.7% growth rate in the previous quarter, the growth rate of private consumption in this quarter showed a slight improvement. This change not only reflects increased consumer confidence but also indicates that household spending is gradually increasing as wages steadily rise, providing strong support for the sustained healthy development of the economy.
In an economy driven by private demand, capital expenditure is crucial. However, it declined by 0.2% in the third quarter, in line with forecasts. While net external demand reduced GDP growth by 0.4 percentage points, it reversed the 0.1% contraction from the previous quarter, bringing new vitality to the economy. At
the same time, the Bank of Japan maintained ultra-low interest rates, noted the reduced risks in the U.S. economy, and hinted that the conditions for a future rate hike are gradually becoming more favorable.
In conclusion, Japan’s economy grew by 0.9% quarter-on-quarter in Q3, exceeding expectations. Strong private consumption was a highlight, providing momentum for economic recovery. However, weak capital spending and deteriorating external economic conditions—especially the slowing U.S. economy and the weak Chinese economy—pose challenges to Japan’s export outlook. Overall, while there are positive signals, Japan’s economy still faces numerous uncertainties and risks.
