Tokyo, Dec 9 (IANS) Japan's economy grew at an annualized 5.6 percent in the July-September quarter, down from a preliminary projection of 6 percent, the authorities said Friday.
The downward revision was largely expected by economists following the government stating recently it was lowering its capital spending estimate, a key factor in calculating gross domestic product, Xinhua reported.
Capital spending was revised downward to a 0.4 percent quarter-on-quarter from a preliminary 1.1 percent rise, the government's latest figures showed.
In addition, the Cabinet Office said that private consumption was downwardly revised to a 0.7 percent increase on quarter, from a preliminary 1 percent rise.
Capital investment by Japanese non-financial companies slumped 9.8 percent in the quarter and on a seasonally adjusted basis, capex, excluding spending on software, declined 2.7 percent to mark a fourth straight quarterly drop, following a 6.3 recent in the previous quarter, the Cabinet Office said.
Japan's third-quarter economic expansion was its first growth in four quarters and came after the earthquake and tsunami disaster in March.
According to the latest figures from the finance ministry, Japanese companies cut capital spending by 9.8 percent from a year earlier in the three months ended September 30, marking the second quarter of retraction and the Cabinet Office noted that in October machinery orders, a key indicator of future capital spending, decreased 6.9 percent from the previous month.
Economists expect Japan's economy to contract in the next quarter as the rebound loses momentum, weighed down by the nation' s persistently strong yen that has forced some firms to move manufacturing operations from Japan to more economically viable countries and seen firms' overseas profits eroded on unfavorable exchange rates and stripped companies here of their competitiveness in global markets.
In addition, downside pressures stemming from the debt-plagued eurozone are expected to impact Japan's fragile export sector with the Bank of Japan warning that the nation's direct exports to Europe, as well as its volume of exports to emerging economies, would likely decline due to ongoing sovereign debt turmoil in the 17-nation, single currency European bloc.
Japan's economy is the third-largest in the world after China and the United States.