The nation’s financial system noticed a pointy contraction within the third quarter
The Japanese financial system slipped right into a contraction within the interval from July to September, ending two straight quarters of progress, based on authorities knowledge launched on Wednesday.
Gross home product (GDP) on this planet’s third-largest financial 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 stoop adopted an enlargement 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,” stated 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 stress on Japanese producers.
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Consumption was unchanged between July and September after sliding 0.9% within the earlier quarter, falling wanting 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,” stated 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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