Japan’s economy grew by 1.2% on an annualized basis in Q3 2024, surpassing both the preliminary estimate and market expectations of 0.9%.
Japan third-quarter GDP growth revised higher
However, this growth was slower than the 2.2% expansion in Q2, despite marking the second consecutive quarter of yearly growth. Capital expenditure slowed significantly due to rising interest rates, while government spending sharply decreased. On a positive note, private consumption saw solid growth, reflecting the effects of wage increases. However, external demand continued to weigh on GDP, contributing negatively for the third straight quarter.
QoQ performance
On a quarterly basis, Japan's GDP expanded by 0.3% in Q3 2024, exceeding the flash estimate and market forecasts of 0.2%. This followed a downwardly revised 0.5% increase in Q2, marking the second consecutive period of quarterly growth. Business investment declined less than expected (-0.1%, compared to an initial estimate of -0.2% and a 1.1% rise in Q2). The negative impact from net trade was also softer than anticipated (-0.2 percentage points, compared to the initial forecast of -0.4 percentage points), as both exports (1.1% vs. 1.5% in Q2) and imports (1.8% vs. 3.3% in Q2) showed further increases. Meanwhile, private consumption remained strong amid rising wages, growing by 0.7% (compared to a flash estimate and consensus of 0.9%, following a 0.6% rise in Q2). Government spending, however, was subdued at 0.1%, much lower than the 0.5% rise in the preliminary estimate and following a 1.0% increase in Q2.
