TOKYO – Japan’s household spending likely returned to contraction in August, when the government expanded emergency restrictions to contain the coronavirus, a Reuters poll showed on Friday.
The government this week ended a state of emergency imposed to combat the pandemic, as the number of new cases and deaths sharply decreased in September and pressure on the medical system is easing.
After rising 0.7 percent in July, household spending shrank 1.5 percent in August from a year earlier, according to an average forecast by a Reuters poll of 18 economists.
Month-on-month, spending is projected to decline 2.0 per cent in August, falling for the fourth month in a row.
“Real consumer spending is expected to be negative over the past month,” economists at the Mizuho Research Institute said.
“Spending on services decreased compared to the previous month due to the spread of the coronavirus, while consumption of goods was impacted by inclement weather and (demand) pressure on home electronics.”
The world’s third-largest economy has bounced back from a sharp contraction in the first three months of the year, thanks to solid business spending and positive private consumption, growing 1.9 percent year-on-year in the second quarter.
But a resurgence in COVID-19 in the summer is likely to impact private spending and overall growth in the third quarter. The government will release its preliminary estimates of the July-September GDP on November 15.
Friday’s poll found that Tokyo’s core consumer price index, which includes oil products but does not include fresh food prices, was likely to rise 0.2 percent in September from a year earlier, compared with July last year. Shows first year-on-year growth since.
Other data for next week is expected to show a current account surplus of 1.54 trillion yen ($13.84 billion) in August, down from 1.91 trillion yen in July.
The government is to release core CPI data for Tokyo at 8:30 a.m. (October 4, 2330 GMT) on October 5, and at 8:30 a.m. (October 7, 2330 GMT) on October 8. ), and current account balances at 8:50 a.m. on October 7 (October 7, 2350 GMT).
This News Originally From – The Epoch Times