12.5 C
Auckland
Friday, July 19, 2024

Popular Now

Japan faces recession – official data

Japan economy news

The country’s economy saw a sharp contraction in the third quarter.

The Japanese economy slipped into a contraction in the period from July to September, ending two straight quarters of growth, according to government data released on Wednesday.

Gross domestic product (GDP) in the world’s third-largest economy contracted 2.1% in the third quarter in a much sharper decline than a median market projection for an annualized 0.6% drop. The slump followed an expansion of 4.5% in the second quarter.

“Given the absence of a growth engine, it wouldn’t surprise me if the Japanese economy contracted again in the current quarter. The risk of Japan falling into recession cannot be ruled out,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

“The weak growth and the specter of slowing inflation could delay the Bank of Japan’s exit from negative interest rates,” he added.

The slowdown has been attributed to stubbornly high inflation that is squeezing household consumption and weak external demand from China and elsewhere, adding pressure on Japanese manufacturers.

Consumption was unchanged between July and September after sliding 0.9% in the previous quarter, falling short of economists’ median estimate for 0.2% growth, data showed.

“The disappointing third-quarter reading serves as a sobering reminder that the country is not yet out of the woods,” said Stefan Angrick, senior economist at Moody’s Analytics.

Inflation-adjusted real wages, an indicator of consumer purchasing power, dropped by 2.4% in September year-on-year, marking the 18th straight month of declines.

Image credit: Jezael Megoza

Promoted Content

Source:RT News

No login required to comment. Name, email and web site fields are optional. Please keep comments respectful, civil and constructive. Moderation times can vary from a few minutes to a few hours. Comments may also be scanned periodically by Artificial Intelligence to eliminate trolls and spam.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest

Trending

Sport

Daily Life

Opinion

Wellington
fog
8.5 ° C
10 °
8.3 °
94 %
3.1kmh
100 %
Thu
10 °
Fri
14 °
Sat
11 °
Sun
12 °
Mon
11 °