Japan: Economic activity slowed sharply in 2018 – BNP Paribas

Louis Boisset, analyst at BNP Paribas, points out that Japanese economic growth decreased sharply in full-year 2018 to 0.7%, from 1.9% in 2017 after being volatile in 2018.

Key Quotes

“The country was hit by a typhoon in the third quarter of 2018 that weakened most of the components of demand, and thus growth (-0.7% q/q). In the fourth quarter, activity picked up mildly (+0.3% q/q).”

“Japan’s growth dynamics will face several challenges in 2019 and beyond. Domestically, private consumption could stall with the planned VAT hike in October 2019.”

“In the longer term, the country’s ageing population remains a key issue. As to the external environment, uncertainty continues to reign against a backdrop of trade tensions and China’s economic slowdown.”