The economy grew by 0.2% in real terms during the July-
September quarter of 1995 over the preceding quarter, or an
annual rate of 0.6%, according to preliminary statistics
released by the Economic Planning Agency.
Japan's third-quarter growth in gross domestic product
decelerated from the 0.6% quarterly growth (2.6% in annual
terms) registered in the second quarter. One big factor was
the slowdown in exports resulting from the new postwar highs
for the value of the yen, which remained at around 80 yen to
the dollar through mid-August. Personal consumption,
meanwhile, was buoyed by the unusually hot summer.
EPA officials noted that the economy was at a
standstill due largely to the strong yen. They added,
however, that bright signs were appearing in certain areas,
such as plant and equipment investment.
Domestic demand factors, such as personal consumption,
accounted for 0.7 points of the quarterly growth, while
external demand (exports minus imports) detracted 0.5 points
from the growth rate.
Exports, which grew by 4.2% on a quarterly basis during
the April-June period, decreased by 1.9% in the third
quarter. Imports, meanwhile, continued growing by 2.6% over
the previous quarter after posting a 4.3% rise in the second
quarter.
Personal spending, which accounts for three-fifths of
total domestic demand, increased by 1.2% over the preceding
three months. This was led by brisk sales of consumer
durables, such as automobiles and electric appliances,
especially air conditioners in the light of the hot weather.
Personal consumption alone contributed 0.7 points to overall
GDP growth.
Capital spending decreased as the strong yen made many
corporations cautious about their investment plans and as a
reaction to the large gains posted in the second-quarter.
Housing purchases were also down in the July-September
quarter.
| Fiscal Year 1994 |
1994 | 1995 | |||
|---|---|---|---|---|---|
| IV | I | II | III | ||
| Real GDP | 0.5 | -1.1 | 0.1 | 0.6 | 0.2 |
| Personal consumption | 1.5 | -0.6 | 0.1 | 0.7 | 1.2 |
| Private housing investment | 8.6 | -4.2 | 1.0 | -6.7 | -5.7 |
| Private plant and equipment investment | -3.5 | -0.3 | 0.5 | 2.8 | -1.9 |
| Increase in private inventories | -105.4 | -- | 55.5 | -25.3 | 55.1 |
| Government consumption | 2.5 | -2.3 | 4.2 | -1.2 | 0.3 |
| Government investment | -1.0 | -3.2 | -3.4 | 3.2 | 5.7 |
| Increase in public inventories | -- | -14.1 | -21.9 | -59.1 | -59.0 |
| Net exports of goods and services | -13.5 | -8.1 | -11.4 | 3.9 | -31.9 |
| Exports of goods and services | 5.7 | 1.9 | -0.0 | 4.2 | -1.9 |
| Imports of goods and services | 10.2 | 3.9 | 1.9 | 4.3 | 2.6 |