TOKYO: After three years of Abenomics and record monetary stimulus from the central bank, Japan’s economy still can’t escape a roller-coaster cycle of expansion and contraction.

The next round will commence on Feb 15, when gross domestic product data for the fourth quarter are released.

The forecast is pessimistic: that Japan’s economy shrank 0.7pc on an annualised basis in the last three months of 2015, according to the estimate of 34 economists who responded to a Bloomberg survey as of Wednesday. Revised data showed the GDP rose 1pc in the third quarter.

“The GDP report will show Japan’s economy is in a very dire situation,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

“There is no driving force for the economy and that’s unlikely to stop this quarter.”

Shinke, who ranked as the top Japan forecaster for the latest Bloomberg GDP survey, predicts a big contraction of 3pc in the fourth quarter.

The economy’s performance has zigzagged over the past three years, since Bank of Japan Governor Haruhiko Kuroda and Prime Minister Shinzo Abe ramped up their stimulus programmes in a bid to end decades of deflation and spur higher wages, consumer spending and investment. Since 2013, Japan’s economy has grown in seven quarters and contracted in four; if the forecasts prove accurate, the last quarter of 2015 will be the fifth of a shrinking economy in three years.

The up-and-down figures underscore the uneven progress Kuroda and Abe have made in spurring growth. A batch of data released last month showed Japan’s economy ended 2015 with a bust, as everything from household spending to industrial production and exports tumbled in December.

Bloomberg-The Washington Post Service

Published in Dawn, February 14th, 2016