Economics
Inventories Act as Wild Card in Japan's Economic Growth Picture
- Upward revision in 3rd-quarter GDP influenced by inventories
- Private inventories subtracted less from growth than forecast
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A surprise driver of the upward revision in Japan’s gross domestic product from contraction to growth in the third quarter was private inventories.
While Tuesday’s GDP revision mainly stemmed from changes to both private inventories and capital spending, the inventories contribution was much stronger than economists had forecast. That led to a bigger shift in the GDP figure than projected -- and what was initially thought to be a second consecutive quarter of contraction is now being called one of growth, avoiding a recession.