Japan Downgrades Q1 GDP on Construction Data Corrections

Reuters

10:16 JST, July 1, 2024

TOKYO (Reuters) — Japan’s economy shrank more than initially reported in the first quarter, the government said in a rare unscheduled revision to gross domestic product (GDP) data on Monday, darkening prospects for a fragile recovery.

The downward revision is likely to lead to a cut to the Bank of Japan’s growth forecasts in fresh quarterly projections due later this month, and could affect the timing of its next interest rate hike, analysts say.

Japan’s real GDP shrank an annualized 2.9% in January-March, down from an earlier estimate of a 1.8% contraction, the revised data showed.

The real GDP for the October-December period was also revised down to an annualized 0.1% growth versus the previous 0.4% increase, while that for the July-September period was revised down to an annualized 4.0% decline from the previous 3.7% drop.

The government said the revisions to GDP figures for January-March reflected corrections made in construction orders data.