Japan economy shrinks more than previously thought in 3Q
TOKYO: Japan’s economy shrank twice as much as initially thought in the three months to September, with natural disasters weighing on investment, official data showed yesterday.
Gross domestic product for the July-September period contracted 0.6 per cent from the previous quarter, Cabinet Office data showed, revising down the figure from the preliminary estimate of a 0.3-per cent contraction.
The reading comes after growth of 0.7 per cent in the April- June period, and was slightly weaker than market expectations of a 0.5per cent contraction.
The main driver of the decline appeared to be private investment, which shrank 2.8 per cent quarter- on- quarter, compared with an initial estimate of a 0.2per cent contraction, the data showed.
“The background to the weak corporate investment is believed to be natural disasters in July which stopped some logistics, such as setting up facilities,” Takashi Miwa, senior economist at Nomura Securities, told AFP.
“This is a temporary, technical contraction and given the latest economic indicators, the economy picked up in the OctoberDecember quarter,” he said, though he cautioned that potential intensification of US-led trade tensions remained a risk factor.
Japan was hit by several natural disasters this summer, including massive flooding in western regions due to torrential rain, a typhoon that inundated a major international airport, and an earthquake in the north that disrupted supply lines.
The temporary closure of the Kansai International Airport led to a fall in tourism and overseas shipments, analysts have said. — AFP