Japan’s economic growth in the last quarter of 2013 was weaker than previously thought, revised data shows, underscoring concerns about the pace of recovery.
The fresh figures will turn the focus to Bank of Japan policymakers as they start a two-day meeting, amid speculation over the introduction of further monetary easing measures to counter a slowdown from a tax rise next month.
The rate hike – seen as crucial to bringing down Japan’s massive national debt – has stoked fears of a slowing recovery as consumer spending drops off owing to higher prices.
The world’s number-three economy expanded 0.2 per cent in the quarter to December and 1.5 per cent through 2013.
That was down from figures last month showing gross domestic product grew 0.3 per cent for the October-December period and 1.6 per cent in 2013.
The 2013 growth figures still marked Japan’s best annual performance in three years, as a blitz program initiated by Prime Minister Shinzo Abe, dubbed Abenomics, rippled through the economy.
“The recovery … lost pace in the second half of the year,” said London-based Capital Economics on Monday.
“Nonetheless, it would be premature to conclude that Abenomics has failed based on these figures alone.
“After all, private consumption and business investment were stalling before PM Abe’s election, but have picked up speed since then. The problem instead lies on the external side.”
A key reason for the downward revision was weak exports, as Japan’s trade imbalance balloons on the back of surging energy bills sparked by the shutdown of its nuclear reactors following the Fukushima crisis.
Atomic power once supplied about a third of the resource-poor nation’s energy.
In separate data Monday, the deficit in the January current account – Japan’s broadest measure of trade with the rest of the world – more than quadrupled to another record figure of 1.589 trillion yen ($A17.09 billion).
The growing imbalance was driven by the soaring costs of imported energy – made pricier by a weak yen – and lacklustre growth in shipments of Japanese goods abroad.
Critics fear the controversial sales tax rise to 8.0 per cent from 5.0 per cent would curtail the budding recovery in an economy beset by years of falling prices, which curbed spending and business investment.
Since the conservative Abe swept national elections in late 2012, the yen lost about a quarter of its value against the dollar – giving a boost to Japanese exporters’ profitability.
The Nikkei shares index soared 57 per cent in 2013, its best performance in more than four decades, while Japan’s growth led G7 nations in the first half of last year.
