This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.bbc.co.uk/news/business-26222281

The article has changed 3 times. There is an RSS feed of changes available.

Version 0 Version 1
Japan's quarterly growth disappoints ahead of sales tax hike Japan's quarterly growth disappoints ahead of sales tax hike
(about 4 hours later)
Japan's economy grew less than expected last year, despite forecasts it would benefit from a jump in spending ahead of a sales tax increase in April. Japan's economy grew less than expected last year, countering forecasts it would benefit from a jump in spending ahead of a sales tax increase in April.
Gross domestic product rose by 1% on an annualised basis in the three-month period to December, compared to market estimates of a 2.8% expansion. Gross domestic product rose by 1% on an annualised basis in the three-month period to December, compared to market estimates for a 2.8% expansion.
This was due to weaker private consumption and capital spending, as well as lower export figures.This was due to weaker private consumption and capital spending, as well as lower export figures.
However, this is Japan's fourth straight quarterly expansion. However, this was Japan's fourth straight quarterly expansion.
The latest data underscores the questions about Japan's economic recovery, and whether the government's policy of 'Abenomics' is working. The latest figures highlight questions about the sustainability of Japan's economic recovery, and whether the government's policy of 'Abenomics' is working.
Prime Minister Shinzo Abe has implemented an aggressive stimulus program aimed at weakening the value of the Japanese currency. "The disappointing GDP result is a reflection of the limit of Abenomics," Takuji Okubo, chief economist at Japan Macro Advisors in Tokyo said.
The Japanese yen lost about 18% of its value against the US dollar last year, but the boost to exports has been limited. "Fiscal stimulus and monetary stimulus can only do so much without the actual change in the competitiveness of Japanese economy.
Mr Abe also pushed through a controversial sales tax increase last year, in an attempt to raise funds to reduce the country's large public debt. Only when there is a real change in the competitiveness of the Japanese companies, and a positive change in the long term economic outlook will there be a real change in Japan's growth performance."
However, Japan's GDP is forecast to shrink in the April-to-June period because of the increase in the consumption tax to 8% from 5%. Trade deficit
Since taking office over a year ago, Prime Minister Shinzo Abe has implemented an aggressive stimulus program aimed at weakening the value of the Japanese currency.
The hope was that a weaker currency would spur purchases of Japanese products such as cars, since they become cheaper to buy abroad.
The Japanese yen lost about 18% of its value against the US dollar last year as a result of his policies, but the boost to exports has been limited.
That's because Japan has also seen a surge in imports, mostly of fuel, to supply the country with power after its nuclear plants were mothballed following the 2011 Fukushima crisis.
This has caused the world's third-largest economy to log an increasingly large and persistent trade deficit.
Sales tax rise
Japan is also struggling to rein in one of the developed world's biggest public debts, which economists have warned would hurt the country's fiscal health in the long term.
To address this, Mr Abe pushed through legislation last year that will see the consumption tax rise to 8% from 5%.
However, Japan's GDP is forecast to shrink in the April-to-June period because of the increase in sales tax, since consumers will put off purchases due to the higher price tags.
"I am not so concerned about domestic demand given a buying rush ahead of a sales tax hike in April will play out more strongly in the current quarter," said Taro Saito, senior economist at NLI Research Institute.
Mr Okubo, meanwhile, forecasts Japan will fall into a recession in 2015.
"Private consumption is likely to tank following the tax rate hike. Both working household as well as pensioners will suffer negative income growth," he said.
"Fiscal stimulus may keep Japan from falling into outright recession in 2014, but the sustained fiscal stimulus through public work will defeat the purpose of raising consumption tax."
Japan's stock market had a mixed reaction to the data, with the benchmark Nikkei 225 index rising about 0.4% in choppy trading.