Japan's GDP grew by 0.2% quarter-on-quarter in Q3 2024, down from a revised 0.5% increase in Q2, yet aligning with market expectations, according to preliminary data. This marks the second consecutive quarter of expansion but underscores a fragile economic recovery amid rising external challenges.
Japan Q3 GDP growth slows as expected
Business investment fell by 0.2%, reversing from a strong 0.9% gain in the prior quarter, as anticipated. Net trade detracted 0.4 percentage points from growth, with exports rising just 0.4% (compared to 2.6% in Q2) while imports grew by 2.1% (down from 2.9%). On a brighter note, private consumption, which drives over half of the economy, surged by 0.9% (up from 0.7% in Q2), far exceeding forecasts of 0.2% growth, fueled by rising wages. Government spending also increased for the third straight quarter, up 0.5% from 0.1%, as part of efforts to offset the effects of summer natural disasters.
Annual figures
On an annualized basis, Japan's economy expanded 0.9% in Q3 2024, a significant slowdown from a revised 2.2% growth in Q2, though still above the 0.7% market forecast. The results showed strength in private consumption and government spending, while capital investment weakened and external demand continued to weigh on growth, marking the third consecutive quarter of negative contribution from net exports.
