Japan averted a technical recession as revised official data on Monday showed the economy returned to growth in the October-December period last year, bolstered by strong capital expenditure.

The upward revisions though were weaker than estimated, with private consumption remaining weak.

Expectations are rising that the Bank of Japan may normalize interest rates as early as its March 18-19 meeting amid signs of robust wage gains at this year’s Shunto spring wage negotiations between unions and employers.

Japan’s gross domestic product expanded 0.4% in the fourth quarter compared with a year earlier, weaker than consensus expectations for 1.1% growth in a Reuters poll. Provisional data last month had showed GDP contracting 0.4%. The economy had contracted 3.3% in the July-September period.

Japan’s fourth-quarter GDP also expanded 0.1% from the previous three months, weaker than the median forecast for 0.3% growth in a Reuters poll. Provisional data had showed a 0.1% contraction. The economy had shrunk 0.8% in the third quarter from the preceding one. 

“The upward revision to GDP growth in the second estimate released today … was smaller than most had anticipated,” Capital Economics head of Asia-Pacific Marcel Thieliant wrote in a client note.

“While there was a large upward revision to business investment, from the initially reported 0.1% q/q decline to a 2.0% q/q jump, that was partly offset by a drag from inventories and a slightly larger fall in private consumption,” he said. “Indeed, the figures confirm that consumption has fallen for three consecutive quarters.”

High inflation has crimped domestic demand and private consumption though, underscoring the fragility of growth in the country. Private consumption fell 0.3% quarter on quarter — more than the provisional estimates of a 0.2% decline.

Reuters reported the Bank of Japan is likely to downgrade its assessment on consumption and factory output at its next policy board meeting on March 18-19, citing three people with knowledge of the matter.

Capital expenditure jumped 2% quarter on quarter, compared with the provisional 0.1% fall the government had estimated, but it was below consensus expectations for a 2.5% increase.

Hopes for an upward GDP revision were boosted after Ministry of Finance data released last Monday showed capital expenditure rose 16.4% in the fourth quarter from a year earlier, and 10.4% on a seasonally adjusted quarterly basis.