Japan's economy grew in the third quarter, avoiding a second technical recession for "Abenomics," Prime Minister Shinzo Abe's stimulus program. While minimal, growth in the world's third-largest economy could help the U.S. offset weakness in China and Europe.
The economy expanded an annualized 1 percent in the third quarter from the second, the Cabinet Office said Tuesday, compared with the 0.8 percent contraction it estimated last month. That means it didn't have two straight quarters of decline -- there was a 0.5 percent contraction in the second quarter -- the technical definition of a recession.
The big swing was in capital spending, revised to a 0.6 percent gain from a 1.3 percent drop.
“Japan’s economy is back on a recovery track after a soft patch. The data points to an improvement in capital spending,” said Hiroaki Muto, chief economist at Tokai Tokyo Research Center Co. in Tokyo, as Bloomberg. “The recovery is nowhere near what you’d call strong but we don’t have to be too pessimistic either.”
Abe, who came to power in 2012, has been working with Bank of Japan Gov. Haruhiko Kuroda to boost growth. Last month, Abe already ordered the drawing up of a supplemental budget, probably in the form of aid to poor pensioners, Bloomberg said. Most economists expect the bank to keep policy unchanged at next week's meeting, with Kuroda predicting third-quarter growth since September.