Japan downgrades GDP numbers for the March quarter amid data corrections
Bank of Japan
Japan's economy shrank more than expected in the March quarter of 2024. Unscheduled revision to gross domestic data (GDP) has worsened the outlook of an already fragile economy. This revision can affect quarterly projects due later this month and subsequently affect the timing of interest rate cuts.
The Bank of Japan is facing multiple issues. Weakening currency and falling economic output are hurting growth prospects. The country is already reeling with older demographics and falling demand. The stock rally is also expected to slow in the latter half of 2024.
According to the latest correction, Japan's real GDP for the months of January to March is 2.9 per cent, instead of the contraction of 1.8 per cent reported before. Earlier GDP projections have also been revised downward, worsening the prospects of an economic recovery. This correction was in the construction order data.
Meanwhile, Japan's land prices rose at the fastest pace since 2010. A brief tourism revival after COVID boosted demand for shopping areas & entertainment complexes. According to Reuters, Tokyo's Ginza shopping area is still the most expensive location in Japan for the 39th straight year.
A weakening yen has also boosted inbound tourism. The country recorded more than 3 million visitors for a third consecutive month in May.