Japan’s economy contracted for the second consecutive quarter in July-September, reflecting sluggish corporate capital expenditures and a slow recovery in consumer spending, government data showed Monday.
The country’s seasonally adjusted gross domestic product fell 0.2 percent from the previous quarter in inflation-adjusted real terms, shrinking at an annualized rate of 0.8 percent, the Cabinet Office said in a preliminary report.
The annualized result was worse than the median forecast of a 0.3 percent drop by 21 economic research institutes polled by Jiji Press.
Japan’s real GDP last contracted for two straight quarters in the April-September period of 2014, when the economy slumped after the country’s consumption tax rate was raised to 8 percent from 5 percent in April that year.
“If the impact of inventory adjustments is excluded, Japan achieved positive growth,” Economic and Fiscal Policy Minister Akira Amari said at a press conference. “The fundamentals [of the economy] are not bad.”
Amari also said, “Although some weaknesses are seen, the Japanese economy stays on a moderate recovery track.”
“The Japanese economy came to a standstill, rather than entering a recession,” said Koya Miyamae, senior economist at SMBC Nikko Securities Inc. “Given somewhat aggressive corporate production plans, Japan’s GDP growth rate is expected to turn positive by a slim margin in October-December on the back of a rebound in production.”
In nominal terms, GDP in July-September grew 0.01 percent from the previous quarter, for an annualized increase of 0.1 percent.
Source and image: Yomiuri