Japan third-quarter GDP revised down as capex, inventories shrink

Japan third-quarter GDP revised down as capex, inventories shrink

KIM KYUNG-HOON

TOKYO (Reuters) - Japan's Cabinet Office slashed its economic growth reading for July-September on Thursday, revising down initial estimates of capital expenditure and inventories - renewing concerns about Japan's growth prospects.

The Cabinet Office said the economy grew at a 1.3 percent annualized rate in July-September, a severe revision from the 2.2 percent annualized growth first estimated and barely over half the median estimate for a 2.4 percent annualized expansion.

In one positive sign, consumer spending was revised up, but the data on the whole could temper optimism that the economy could accelerate heading into next year.

The revised figure translates into quarter-on-quarter growth of 0.3 percent in real, price-adjusted terms, against an initial reading of 0.5 percent growth and the median estimate for 0.6 percent growth.

Capital expenditure fell 0.4 percent in the quarter, versus the preliminary estimate of 0.0 percent, as steel and real estate companies reduced investment.

Inventories subtracted 0.3 percentage point from growth, more than a preliminary reading of a 0.1 percentage point contraction.

The government adopted a new base year for calculating gross domestic product that led to changes in previous data and made forecasting revised third quarter GDP more difficult, economists said.

The new calculation method, which will include research and development as capital expenditure for the first time, has been applied to GDP data going back to 1994.

Private consumption, which accounts for roughly 60 percent of the economy, rose 0.3 percent, versus the preliminary estimate of 0.1 percent growth.

(Reporting by Stanley White; Editing by Eric Meijer)

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