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Economy

Japan's GDP growth upgraded to 1.8% for July-September

Revised capital investment comes in well above initial reading

Japan's economy performed better than expected in the last quarter, but the impact of October's consumption tax increase now looms large.

TOKYO (Kyodo) -- Japan's economy grew an annualized real 1.8 percent in the July-September quarter, revised up from the 0.2 percent expansion initially reported, supported by an upgrading of capital investment, government data showed Monday.

The result outpaced the average 0.8 percent growth forecast by private-sector economists polled by Kyodo News.

The growth in real gross domestic product, the total value of goods and services produced in the country adjusted for inflation, corresponds to a 0.4 percent increase from the previous quarter, according to the Cabinet Office.

Capital expenditure rose 1.8 percent from the previous quarter, improving from the preliminary reading of 0.9 percent.

Private consumption, which accounts for more than half of Japan's economy, increased 0.5 percent, up from the initial reading of 0.4 percent.

But consumer spending is projected to drop in the October-December period following the consumption tax hike starting Oct. 1, a development that is highly likely to lead the world's third-largest economy to shrink in the corresponding period.

Public investment was upgraded to 0.9 percent from 0.8 percent.

Nominal GDP, which is not adjusted for inflation, grew an annualized 2.4 percent in the reporting quarter, up from a 1.2 percent expansion.

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