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Japan Q3 GDP seen shrinking on natural disasters, overseas economic slowdown: Reuters poll

Reuters  |  TOKYO 

By Kaori Kaneko

TOKYO (Reuters) - Japan's economy was expected to shrink in the third quarter after natural disasters disrupted production and a slowdown in overseas demand undermined exports, a poll found on Tuesday.

Strong typhoons in western and a powerful earthquake in the northern island of forced some factories and major airports to close temporarily.

Analysts believe Japan's economy will recover from the setbacks caused by the quarter's natural disasters, but see risks to growth from declining momentum in the global economy.

Spillover effects from the US-trade dispute were also a worry, they said.

(GDP) grew an annualised 3.0 percent in April-June on strong capital spending, the fastest growth since 2016, but was seen shrinking 0.3 percent quarter-on-quarter in July-September, an annualised rate of 1.0 percent.

"Data will likely show the economy was at a standstill," said Yoshiki Shinke, at Research Institute.

He sees the economy remaining on a recovery trend, led by the corporate sector, but noted that a slowdown in exports was a concern because some overseas markets were softening.

"We need to take heed of the risk that the pace of economic recovery in October-December in may be weak - depending on the global economy."

The poll found capital spending would be flat in July-September after growing 3.1 percent in the second quarter.

Analysts project capex will recover on demand for to cope with labour shortages and construction work for in Tokyo.

Private consumption, which accounts for about 60 percent of GDP, was seen slipping 0.2 percent for the quarter, following a 0.7 percent gain in April-June.

External demand - or exports minus imports - was seen likely to take 0.1 percentage point off GDP growth, the poll showed.

expects the economy will return to growth in the fourth quarter as it recovers from the effects of natural disasters.

"But...the global economy has already hit its peak and there is a growing risk that downward pressure from the Sino-U.S. trade war could intensify in 2019," said Yoshimasa Maruyama, at

The will publish the GDP data on Nov. 14 at 8:50 a.m.(2350 GMT, Nov. 13).

(Reporting by Kaori Kaneko, editing by Eric Meijer)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, November 06 2018. 11:48 IST