TOKYO (Reuters) - Japan’s economy likely grew faster in the fourth quarter than initially reported, as companies ramped up investment in plant and manufacturing equipment, a Reuters poll showed.
Separate data is also expected to show the country’s current account surplus for January likely narrowed from the previous month due to a temporary slowdown in exports before the Lunar New Year holidays, the poll of economists showed.
Any upward revision to gross domestic product is likely a welcome sign to the government, because policymakers have been counting on an increase in business investment to drive future growth and increase low productivity.
“Corporate sentiment among manufacturers has been improving, and we are finally starting to see this reflected in capital expenditure,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities.
“I expect more capital expenditure to come through, and I think the economy is headed in the right direction.”
GDP growth for the October-December quarter is expected to be upwardly revised to an annualized 1.6 percent from a preliminary 1.0 percent, according to the median estimate of 20 economists.
The Cabinet Office will release the data at 8:50 a.m. Tokyo time on March 8, which is 2350 GMT on March 7.
The capital expenditure component of GDP is forecast to be revised up to 1.7 percent growth from the previous quarter, which is almost twice as fast as the 0.9 percent quarterly expansion in the preliminary data.
Some economists expect capital expenditure to increase further as companies will soon have to start investing in more efficient equipment to deal with a shrinking pool of workers as the population ages.
However, U.S. economic policy poses a risk, because companies could suddenly turn cautious on capex if U.S. President Donald Trump adopts protectionist trade policies.
Separate data from the finance ministry is expected to show Japan’s current account surplus in January narrowed to 239.0 billion yen ($2.09 billion) from 1.1 trillion yen in the previous month due to a slowdown in exports.
Japan’s exports tend to slow in January as factories in China curb output before the Lunar New Year holidays, but this is likely to be temporary as global demand has shown positive signs so far this year.
Editing by Jacqueline Wong