TOKYO (Reuters) – Japan’s economy likely rebounded in the third quarter as global demand picked up, a Reuters poll showed, but the effects of the coronavirus crisis persisted and it could take some time to return to pre-pandemic levels.
Gross domestic product (GDP) is forecast to have grown an annualised 18.9% in July-September, the poll of 18 economists showed, the fastest pace of growth on record since comparable data became available in 1980.
On a quarter-on-quarter basis, GDP is expected to have expanded 4.4% in the third quarter after it contracted 7.9% in the previous three months, the poll showed.
A return to growth would pull the world’s third-largest economy out of its worst postwar recession, but analysts say a rapid recovery like that seen in China is unlikely.
“The economy likely rebounded sharply in July-September thanks to a steady pickup in exports and consumer spending recovery after the government lifted emergency status,” said Shinichiro Kobayashi, senior economist at Mitsubishi UFJ Research and Consulting.
“Although the economy has escaped from the worst period, the pace of recovery is slow as the economic activity remained low and capital spending continued to be weak.”
Private consumption, which accounts for more than half of Japan’s economy, was seen rising 5.1% for the quarter, the poll showed, after it fell 7.9% in April-June.
External demand – or exports minus imports – likely contributed 2.6 percentage point to GDP growth for the quarter, as global economic activity started to pick up with the easing of coronavirus lockdowns.
But capital spending was expected to have fallen 3.0% in the third quarter after a 4.7% drop in the previous quarter, according to the poll.
The Cabinet Office will announce GDP at 8:50 a.m. on Monday, Nov. 16 (2350 GMT, Sunday).
Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, likely fell 0.7% in September from the previous month, the poll found.
That would be the first fall in three months as firms kept their caution over business spending due to the pandemic.
The Cabinet Office will publish the machinery orders on Nov. 12.
Data on Friday showed Japan’s household spending slumped in September from a year earlier and real wages slid for the seventh straight month.
(Reporting by Kaori Kaneko; Editing by Kim Coghill)