Japan Lowers 1Q Growth Estimates Amid Weak Demand and Rising Prices

Japan has revised its economic growth estimates, revealing a 2.9% annual contraction in the first quarter, according to a survey by the Bank of Japan. The revised GDP data reflects changes in construction activity figures. Public investment saw a significant decline, contracting at 1.9%, down from a previously reported 3% growth. Additionally, private residential investment fell by 2.3%, a slight revision from the earlier estimate of a 2.5% decline.

The survey also indicated a modest improvement in business sentiment among large and medium-size manufacturers. However, it highlighted continued weakness in demand both domestically and internationally. Japan's economy grew at a 0.1% annual rate in the last quarter of 2014 and is projected to expand at an annual rate of 1.8% in 2023. The depreciation of the Japanese yen against the U.S. dollar has provided a boost to exporters but has also led to increased costs for imported commodities and products, particularly oil and gas.