Japan's Slow Growth Outlook Expected to Continue in Coming Quarters

Foreks - Marcel Thieliant from Capital Economics suggested that the Japanese economy lost momentum in the third quarter, and the GDP growth is expected to continue this slow trend in the upcoming quarters. Thieliant noted that consumer spending increased on a quarterly basis, stating, "However, the details were quite encouraging." He believes that the central bank will be encouraged by the strength in consumer spending and expects another interest rate hike next month. Capital Economics forecasts GDP growth to align closely with potential at 0.8% in 2025.

Krishna Bhimavarapu, an economist at State Street Global Advisors APAC, argued that Japan's recent GDP data indicates a slowing economy but surprisingly resilient private consumption. He noted that this situation could reduce the need for large stimulus, but believes it will still be sustained through a budget that is larger than usual. Bhimavarapu also mentioned that the GDP data underscores the significance of potential higher wage increases that may also be followed by Prime Minister Shigeru Ishiba's new administration.