Japan’s household spending likely dropped in January from a year earlier, falling for a second straight month, after the government introduced a state of emergency to contain the coronavirus that month, a Reuters poll showed on Friday.
Household spending likely shed 2.1% in January from a year earlier, according to a median forecast in a Reuters poll of 15 economists, after a 0.6% decline in December. On a monthly basis, spending likely fell 3.1% in January after a 0.9% gain in December, according to the poll.
“Stay-at-home demand such as for electric appliances and food and beverages remained firm but service spending such as travel and eating out appeared to have weakened,” said Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute.
Japan’s export-reliant economy, the world’s third largest, has bounced back from its worst postwar recession last year thanks to a rebound in overseas demand.
But ongoing coronavirus curbs are hitting Japan’s services sector as the country grapples with its third wave of infections. Japan’s government plans to extend a state of emergency in Tokyo and three neighbouring prefectures, Economy Minister Yasutoshi Nishimura said on Friday.
Japan’s gross domestic product (GDP) likely expanded an annualised 12.8% in October-December, according to analysts in the poll, slightly higher than a preliminary reading of 12.7%.
The government is due to release revised GDP data and household spending data on March 9.
GDP was seen rising 3.0% in the October-December period from the previous quarter, unchanged from an initial estimate, the poll showed.
Capital spending likely grew 4.1% in the fourth quarter from the previous three months, the poll showed, compared with an initial reading of 4.5% growth.
Analysts said better-than-expected public spending likely supported overall GDP in the fourth quarter of 2020.
REUTERS | TOKYO