Japan Q3 GDP Revision Shows Deeper Contraction as Economy Shrinks 2.3%

Japan’s economy shrank faster than first reported in the July–September quarter, revised Cabinet Office data showed, highlighting the impact of weaker business spending despite a modest rise in consumption.

Under the Japan Q3 GDP revision, real gross domestic product fell at an annualised 2.3%, compared with an initial estimate of 1.8% and a median forecast of 2.0%, marking the largest contraction since the third quarter of 2023.

GDP declined 0.6% quarter on quarter, versus 0.4% in the preliminary reading.

Private consumption was revised up to a 0.2% increase, while capital expenditure was revised down to a 0.2% fall instead of a previously estimated 1.0% rise.

External demand subtracted 0.2 percentage points from growth, while domestic demand shaved 0.4 points.

Economists said the Japan Q3 GDP revision is unlikely to change expectations that the Bank of Japan will raise interest rates at its Dec.18–19 meeting.