MNI BRIEF: Japan Q1 GDP To Be Little Changed - Economists

Japan's economy likely contracted at the same pace in Q1 as initially estimated, with little change seen in private consumption and capital investment, according to economists following the release of a key government survey.

The median forecast of seven economists sees revised Q1 real GDP at -0.2% quarter-on-quarter, or an annualised -0.7%, unchanged from the preliminary estimate.

Capital investment is expected to be revised slightly lower to +1.3% q/q from the initial +1.4%, despite government data showing that capex excluding software rose 1.8% q/q in Q1, up from +1.3% in Q4. Forecasts for capex ranged from +0.9% to +1.7%.

Private consumption is expected to be unrevised at 0.0% q/q, while public investment is also seen unchanged at -0.4% q/q.

The contribution of private-sector inventories to GDP is forecast to remain at +0.3 percentage points, while net exports are expected to subtract 0.8pp from growth, in line with the preliminary estimate.

Looking ahead, economists expect Japan’s economy to weaken in Q2 as recently announced tariffs weigh on exports and high prices continue to dampen household spending. Persistent uncertainty is also seen limiting capital investment.

The Cabinet Office will release the second preliminary Q1 GDP data at 0850 JST on Monday, June 9 (2350 GMT on June 8).