Japan’s GDP contracts 1.2pc in Q2
TOKYO: The Japanese economy shrank at an annual rate of 1.2 per cent in the April-to-June period, an improvement from an initial estimate of a 1.6 per cent contraction, the government said on Tuesday.
Consumer spending, which accounts for about 60 per cent of gross domestic product, declined 0.7 per cent, slightly less than a preliminary reading of a 0.8 per cent fall, the Cabinet Office said.
Despite the upgrade in the gross domestic product for the second quarter, “the overall trend has not changed, with spending and exports proving to be sluggish,” an unnamed Cabinet Office official was quoted by Kyodo News agency as saying. Exports dropped 4.4 per cent quarter-on-quarter for the first contraction in six quarters amid slow growth in China and other emerging economies, while imports were down 2.6 per cent, both unchanged from the preliminary report, the office said.
Corporate investment, which Abe’s government sees as key to bolstering the economy, fell 0.9 per cent, a larger drop than the initial estimate of a 0.1 per cent decrease, the office said.
Last year, the world’s third-largest economy fell into a brief recession in the second and third quarters following an increase in the sales tax in April.
The Bank of Japan said in July it expected the economy to expand 1.7 per cent for the current financial year through March 2016, downgraded from the 2 per cent growth estimated in April.