Japan’s economy is likely to recover in the quarter due to strong consumption: Reuters poll Reuters

By Kantaro Komiya

TOKYO (Reuters) – The Japanese economy is likely to rise in the last three months of 2021, when consumption fell in COVID-19 cases, according to a Reuters poll, although it may return to contraction this quarter after rising Omicron infections. .

The survey also showed that wholesale prices have continued to rise since a year earlier in January, a sign that energy and raw material costs will continue to erode companies ’profits.

The world’s third-largest economy grew by 5.8% year-on-year in October and rebounded from a 3.6% contraction in the third quarter in December, according to the average forecast of 18 economists surveyed by Reuters.

The rise was largely due to a 2.2% rise in private consumption, which accounts for more than half of Japan’s gross domestic product (GDP), according to the survey.

Capital spending was likely to gain 0.5%, while external demand added 0.3 percentage points to GDP growth in October-December after not adding or removing data from the previous quarter, the survey showed.

“The Japanese economy was clearly on the rise in October-December as pedestrian traffic revived due to the lifting of COVID-19 borders and the fall in infection cases,” SMBC Nikko Securities economists said.

Separate data are likely to see wholesale prices rise by 8.2% in January from a year earlier, slowing for the second month in a row, but still close to the 9.0% record set in November, the survey showed.

Household spending is likely to have risen 0.3% in December from a year earlier, and was the first increase in five months, according to a survey.

The government will release government data at 8:50 a.m. on Oct. 15 (2350 GMT, Feb. 14) and household spending data at 8:30 a.m. on Feb. 8 (2330 GMT, Feb. 7).

The Bank of Japan will release wholesale price data on February 10 at 8:50 am (2350 GMT, February 9).

The government has reintroduced coronavirus restrictions in most areas of Japan, and local authorities are considering even stricter restrictions to stop the rapid spread of the Omicron variant. On Thursday, the number of daily infections in Japan exceeded 100,000 for the first time.