Japan GDP: Above potential in Q3-17, but growth profile deteriorates - Natixis

Kohei Iwahara, Research Analyst at Natixis, notes that Japan’s GDP increased by +0.3% in Q3-17 for the seventh consecutive quarter and while the economy expanded above potential, the growth profile deteriorated, as the economy was largely dependent on external demand.

Key Quotes

“Public investment, which has been an important growth engine declined in Q3-17 and its leading indicator points to a further deceleration. Because of structurally weak wage growth and poor weather condition, private consumption as well as residential investment declined. Going forward, Japan is anticipated to become more sensitive to global economic development, keeping the BoJ the monetary policy accommodative. The government could also introduce a small stimulus package, should the global economy deteriorate.”