Japan's economy shrank in July-September as trade falls
TOKYO (AP) – The Japanese economy declined at an annual rate of 1.2 per cent in July-September, as spending, investment and exports fell, according to government data released Wednesday.
Preliminary data from the Cabinet Office showed seasonally adjusted gross domestic product – total value of one nation's goods and services – doubled 0.3 percent in the third quarter of the previous quarter.
Taking on growth for the world's third largest economy was reduced trade, with exports falling 1.8 percent and imports dropping 1.4 percent, data show. Consumer expenditures and corporate investments were also down.
The economy grew for the previous quarter in April-June, but entered the quarter before that. The contraction in the first quarter ended the longest straight expansion period for Japan for almost three decades.
Harumi Taguchi, chief economist at HIS Markit in Tokyo, said that natural disasters in the third quarter had weighed on consumer travel and spending, which meant that growth could recover if such disasters did not occur during the last quarter of the year.
The closure of a major airport in the Western Kansai area after a typhoon was one of natural disasters that led to growth, he said. A large earthquake also hit the northernmost island of Hokkaido during the quarter, which led to fatal landslides and widespread eruptions.
Japan has continued moderate growth under Prime Minister Shinzo Abe's "Abenomics" policy based on a deflationary program for cheap lending.
However, other factors damage the economy, such as the country's continued workforce and slow wage growth.
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