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Robert Carnell, chief economist at ING, points out that in 1Q14, the last quarter ahead of the April 2014 consumption tax hike, Japanese GDP growth accelerated to 3.9%QoQ at an annualised rate, having registered -0.2% the previous quarter.

Key Quotes

“The acceleration came from front-loading of spending ahead of the tax hike, on everything from cars to toilet rolls. There is no evidence of anything like this in 2019, ahead of the October consumption tax hike.”

“3Q19 GDP growth registered only 0.2%QoQ at an annualised rate. In other words, it barely grew at all on a strict quarter on quarter basis according to these preliminary, and admittedly prone-to-revision figures.”

“Private consumer spending grew only 0.4%QoQ (seasonally adjusted annualised rate – saar). Business investment was a bit better at 0.9% on the same basis, but overall, domestic demand was exceptionally disappointing.”