Current:Home > ScamsJapan’s economy sinks into contraction as spending, investment decline-LoTradeCoin
Japan’s economy sinks into contraction as spending, investment decline
View Date:2024-12-23 22:11:24
TOKYO (AP) — Japan’s economy slipped into a contraction in the third quarter, decreasing at an annual pace of 2.1% as consumption and investments shrank, the government reported Wednesday.
Real gross domestic product, which measures the total value of a nation’s products and services, fell 0.5% in the July-September period for the world’s third largest economy, the Cabinet Office said. That would produce a 2.1% drop if the quarter’s performance continued for a full 12 months.
The downturn came after the economy grew a revised 3.7% in the first quarter and a revised 4.5% in the second quarter on an annualized basis, according to the government figures.
The third quarter’s performance was far worse than what had been expected, according to the financial services company ING, which had forecast an annual contraction of 0.5%.
“Most of the miss in the consensus forecast came from weaker-than-expected domestic demand items, such as consumer spending, business investment and inventory accumulation,” Robert Carnell, ING’s head of research for the Asia-Pacific area, said in a report.
Private consumption shrank an annualized 0.2% during the quarter, while corporate investment decreased 2.5%.
Economic activity in the previous two quarters got a boost from recovering exports and inbound tourism. Social restrictions related to the COVID-19 pandemic have gradually eased, allowing for more travel and a fix to the crimped supply chain for production.
Exports managed to eke out 0.5% growth in the latest quarter, in contrast to a 3.2% rise in the second quater. Auto exports have recovered after stalling over the shortage of computer chips and other parts. Also adding to exports was tourism revenue.
Public demand, which includes government spending, rose at an annual pace of 0.6% in the latest quarter.
Given the numbers, Japan’s central bank isn’t likely to consider any move toward higher interest rates.
The Bank of Japan has taken a super-easy monetary policy for years, with zero or below-zero interest rates aimed at energizing an economy long beset by deflation, which reflects the stagnation that has plagued Japan with its aging and shrinking population.
Some analysts said the sharp contraction could be temporary.
Prime Minister Fumio Kishida has pushed a 17 trillion yen ($113 billion) stimulus package, including tax cuts and household subsidies. A supplementary budget for its funding recently won parliamentary approval.
___
Yuri Kageyama is on X, formerly Twitter: https://twitter.com/yurikageyama
veryGood! (24)
Related
- 'Squid Game' creator lost '8 or 9' teeth making Season 1, explains Season 2 twist
- Leave your finesse at the door: USC, Lincoln Riley can change soft image at Michigan
- Mission specialist for Titan sub owner to testify before Coast Guard
- Watch: Astros' Jose Altuve strips down to argue with umpire over missed call
- Why Suits' Gabriel Macht Needed Time Away From Harvey Specter After Finale
- Man says he lied when he testified against inmate who is set to be executed
- Los Angeles area sees more dengue fever in people bitten by local mosquitoes
- Newly released Coast Guard footage shows wreckage of Titan submersible on ocean floor
- Candidates line up for special elections to replace Virginia senators recently elected to US House
- Found: The Best Free People Deals Under $50, Featuring Savings Up to 92% Off & Styles Starting at Just $6
Ranking
- Rōki Sasaki is coming to MLB: Dodgers the favorite to sign Japanese ace for cheap?
- 2 corrections officers stabbed, 3 others injured in assault at Massachusetts prison
- Powerball winning numbers for September 18: Jackpot rises to $176 million
- Winners of the 2024 Python Challenge announced: Nearly 200 Burmese pythons captured
- Can't afford a home? Why becoming a landlord might be the best way to 'house hack.'
- See Jamie Lynn Spears' Teen Daughter Maddie Watson All Dressed Up for Homecoming Court
- Leaders of Democratic protest of Israel-Hamas war won’t endorse Harris but warn against Trump
- California law cracking down on election deepfakes by AI to be tested
Recommendation
-
5-year-old boy who went missing while parent was napping is found dead near Oregon home, officials say
-
The Latest: Both presidential candidates making appearances to fire up core supporters
-
Two Georgia deaths are tied to abortion restrictions. Experts say abortion pills they took are safe
-
US home sales fell in August despite easing mortgage rates, more homes on the market
-
Maryland man wanted after 'extensive collection' of 3D-printed ghost guns found at his home
-
Sam's Club workers to receive raise, higher starting wages, but pay still behind Costco
-
California’s cap on health care costs is the nation’s strongest. But will patients notice?
-
Georgia Sen. Jon Ossoff seeks more control over postmaster general after mail meltdown