Preview: Forecasters See Japan Q3 GDP Revised Lower to -0.5% on Quarter on Weaker Capex, Public Investment; GDP Skewed Down by Tariff Effects
Japan's revised GDP for Q3 2025 is expected to show a deeper decline of -0.5% q/q, down 2.1% annualized, due to weaker capital expenditure and public investment. The preliminary estimate was -0.4% q/q, down 1.8% annualized. The decline is driven by reduced exports following U.S. tariffs. Domestic demand is expected to contribute -0.3 percentage points, with capital expenditure slowing to +0.3% and public investment falling to -0.6%.
Monday, Dec. 8
0850 JST (2350 GMT/1850 EST Sunday, Dec. 7) Cabinet Office releases the revised GDP for July-September 2025.
Mace News median: -0.5% q/q (range -0.6% to -0.4%) vs. Q3 prelim -0.4%; -2.1% annualized (range -2.4% to -1.6%) vs. Q3 prelim -1.8%; +1.1% y/y (range +0.9% to +1.1%) vs. Q3 prelim +1.1%
Japan’s revised GDP data for the July–September quarter are expected to show a slightly deeper decline, reflecting slower growth in private corporate capital expenditure and public investment. The preliminary estimate had already marked the first contraction in six quarters, driven by weaker exports following the impact of U.S. tariffs.
Revised GDP is forecast to fall 0.5% on the quarter (down 2.1% annualized), compared with the preliminary reading of -0.4% (down 1.8% annualized).
A survey released on November 17 showed that preliminary GDP shrank 0.4% in the third quarter from the previous quarter. This was a slightly smaller contraction than the consensus forecast of -0.7%. The decline largely reflected a pullback in net exports, as expected after export front-loading ahead of U.S. tariffs boosted shipments in the second quarter.
In the revised Q3 data, domestic demand is expected to have contributed -0.3 percentage point to overall GDP, compared with the initial estimate of -0.2 point. Capital expenditure is projected to slow to +0.3% from the preliminary +1.0%. Public investment is also seen falling to -0.6%, compared with the initial estimate of +0.1%.
Consensus forecasts are shown as quarter-on-quarter percentage changes, except for domestic demand, private inventories and net exports, which are expressed in percentage-point contributions. Preliminary figures are in parentheses.
GDP q/q: -0.5% (-0.4%); 1st drop in 6 qtrs
GDP annualized: -2.1% (-1.8%); 1st drop in 6 qtrs
GDP y/y: +1.1% (+1.1%); 5th straight rise
Domestic demand: -0.3 point (-0.2 point); 1st drop in 3 qtrs
Private consumption: +0.1% (+0.1%); 6th straight rise
Business investment: +0.3% (+1.0%); 4th straight rise
Public investment: -0.6% (+0.1%); 2nd straight drop
Private inventories: -0.1 point (-0.2 point); 1st drop in 3 qtrs
Net exports (external demand): -0.2 point (-0.2 point), 1st drop in 2 qtrs
