- Hiroaki Muto, chief economist at Tokai Tokyo Research Center Co.
The Japanese economy avoided a technical recession in the third quarter, a revised official data showed. The world's third biggest economy grew 0.3% in the reported period, compared with –0.2% estimated initially. The revision offers some relief to Prime Minister Shinzo Abe, who has made reviving the nation's economy a top priority for his administration. Nevertheless, Japan's economy continues to underperform, after being in recession four times since the global financial crisis. Measured on an annual basis, economic output rose 1%, compared with the first estimate of a 0.8% contraction. Private inventories were revised from a 0.5% decrease to a 0.2% drop, while gross fixed capital formation was revised from a 0.1% decline to a 0.1% increase, adding 0.1 percentage points to growth over the quarter. Even though the world's third biggest economy managed to escape recession in the third quarter, the chances of a near-term recovery look limited as policy makers continue to refrain from adding large-scale stimulus.
Meanwhile, a separate report showed Japan's current account surplus doubled in October, driven by an improvement in the primary income balance. The seasonally adjusted current account surplus rose from 776.2 billion yen in September to 1.49 trillion yen in October.
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