The nation’s economic system noticed a pointy contraction within the third quarter
The Japanese economic system slipped right into a contraction within the interval from July to September, ending two straight quarters of progress, in keeping with authorities knowledge launched on Wednesday.
Gross home product (GDP) on the planet’s third-largest economic system contracted 2.1% within the third quarter in a a lot sharper decline than a median market projection for an annualized 0.6% drop. The hunch adopted an growth of 4.5% within 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,” mentioned 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 excessive inflation that’s squeezing family consumption and weak exterior demand from China and elsewhere, including strain on Japanese producers.
Consumption was unchanged between July and September after sliding 0.9% within the earlier quarter, falling in need of economists’ median estimate for 0.2% progress, knowledge confirmed.
“The disappointing third-quarter reading serves as a sobering reminder that the country is not yet out of the woods,” mentioned Stefan Angrick, senior economist at Moody’s Analytics.
Inflation-adjusted actual wages, an indicator of client buying energy, dropped by 2.4% in September year-on-year, marking the 18th straight month of declines.
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(RT.com)