November 14, 2018 11:52:22 am
The Japanese economy shrank at an annualized rate of 1.2 per cent in July-September, as consumer spending, investment and exports fell, according to government data released Wednesday.
Cabinet Office preliminary data showed seasonally adjusted gross domestic product — the total value of a nation’s goods and services _ dipped 0.3 per cent in the third quarter from the previous quarter.
Dragging on growth for the world’s third-largest economy was diminished trade, with exports falling 1.8 per cent and imports dropping 1.4 per cent, the data show. Consumer spending and company investments were also down.
The economy grew for the previous April-June quarter, but contracted the quarter before that. That contraction, in the first quarter, ended the longest straight period of expansion for Japan in nearly three decades.
Harumi Taguchi, chief economist at HIS Markit in Tokyo, said natural disasters during the third quarter had weighed on consumer travel and spending, which meant growth could recover if such disasters don’t happen during the year’s final quarter.
The closure of a major airport in the western Kansai area after a typhoon was one of the natural disasters that brought down growth, he said. A major earthquake also hit the northernmost island of Hokkaido during the quarter, causing fatal landslides and widespread blackouts.
Until recently, Japan has been keeping up moderate growth under Prime Minister Shinzo Abe’s “Abenomics” policies based on a deflation-fighting stimulus program of cheap lending.
But other factors are hurting the economy, such as the nation’s continuing labour shortage and slow wage growth.
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