MNI BRIEF: Japan Q1 GDP To Fall 0.4% Q/Q; Annualised -1.6%

Japan's economy over Q1 is expected to have shrunk by 0.4% q/q, or 1.6% annualised, the first contraction in two quarters in the wake of weaker private consumption, capital investment and net exports, private economists predicted.

GDP grew 0.1% q/q, or an annualised 0.4%, in Q4 2023. Economists predicted private consumption, which accounts for about 60% of the GDP, has fallen 0.2% q/q following Q4's -0.3%.

The Cabinet Office will release preliminary Q1 GDP data at 0850 JST on Thursday, May 16 (2350 GMT on Wednesday, May 15).

Capital investment during the first quarter is expected to have fallen 1.2% q/q, reversing from Q4's 2.0%. Public investment is expected to have risen 1.8% q/q vs. Q4’s 0.8% fall. Net exports of goods and services is expected to have made a negative 0.3 percentage point contribution to the total domestic output, after making a 0.2 pp contribution in Q4.

Economists expect Japan’s economy to rise in Q2 due to a recovery of capital investment and private consumption.