August 26, 2002
The Japanese Economy Is in Worse Shape Than I Had Thought

The Financial Times reports that recent Japanese economic statistics are about to be revised sharply downward--and that taken together the first and second quarters of 2002 will show a real GDP growth rate of only 1.5 percent per year. Thus the hopes--based on preliminary first-quarter statistics--that Japan was pulling out of its long depression appear to have been false. New data may cast doubt on Japan recovery By David Pilling in Tokyo Published: August 26 2002 17:22 | Last Updated: August 26 2002 17:22 Japan may this week drastically scale back preliminary estimates for first-quarter growth, removing much of the gloss from what many had hopefully interpreted as a sharp rebound from the country's worst post-war recession.An improvement in the methodology by which gross domestic product is calculated could see revised GDP numbers for the first three months, due to be published on Friday, fall to about half the initial estimate of 1.4 per cent. The original figure implied an annualised growth rate of an improbable 5.7 per cent."I think it is pretty much established that the new figures will show that GDP did not perform as well as originally stated because those initial figures were based on wildly exaggerated...

Posted by DeLong at 10:01 AM