The consensus is that Japan avoided two successive quarters of contracting GDP at the end of 2012, albeit only just. In contrast, we still expect a small decline. Looking ahead, we are tweaking our forecasts for 2013 and 2014. Most commentators are focusing on the potential boost from the additional fiscal stimulus, but we expect this to be small. Instead, the decisive factor should be the impact of the consumption tax hike scheduled for April 2014.
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