Japan’s Q3 GDP growth dropped by 1.2% qoq ann, mainly due to natural disasters
According to the first print, Japan’s GDP growth dropped by 0.3% qoq and 1.2% qoq annualized in Q3, broadly in line with market expectations. The Q3 result follows growth rates of 3.0% and -1.1% qoq ann. in the previous two quarters, rendering the development this year very volatile so far.
- Japan’s GDP growth dropped predominantly due to natural disasters.
- Apart from a negative inventory contribution, all major demand components showed negative readings.
- However, as the impact from natural disasters is temporary, we expect growth to rebound in Q4.
- Additional help will come from government supplementary disaster budgets and – in the longer-term – from plans to temporarily, largely offset the impact of the sales tax hike in October 2019.