Japan has revised up its consumption estimate - for the first time in 13 months - citing rising spending on services. However, production and export estimates have been downgraded amid supply chain disruptions and weaker Chinese GDP growth. Meanwhile, the assessment of the overall economic situation in Japan remained unchanged, while the assessment of private consumption was improved for the first time since October 2020 in response to rising consumer sentiment and higher spending in the service sector.
"The Japanese economy is recovering, but at the same time shows weakness against the background of the situation around the coronavirus," the government said.
The government reported that the export estimate was lowered against the background of a reduction in the volume of supplies to Asia, which led to weak production, while the recent increase in the cost of raw materials may cause a decrease in corporate profits and household spending.
According to official data, Japan's GDP shrank by 3.0% per annum in the third quarter, affected by the pandemic and disruptions in the supply chain. However, analysts expect the economy to recover in the last three months of the year amid rising consumer demand.