Tokyo, 8 December, /AJMEDIA/
Japan’s economy shrank an annualized real 0.8 percent in July-September, less than previously reported, as domestic demand was slightly stronger, although its recovery from the COVID-19 fallout lacked vigor, government data showed Thursday.
Real gross domestic product, adjusted for inflation, shrank 0.2 percent on a quarterly basis, revised upward from minus 0.3 percent. Japan has seen the size of its economy return to pre-pandemic levels, but its recovery has been slower than other economies.
The July-September quarter saw imports surge on higher energy costs and a sharp weakening of the yen that inflated the value of inbound goods. Growth in imports works as a negative for GDP, which measures the total value of goods and services produced in a country.
Despite inflation rising to levels unseen in decades, however, pent-up demand following the removal of antivirus curbs helped support private consumption, with businesses stepping up investment to boost output capacity and prepare for the post-COVID era.
Private consumption, which accounts for more than half of the economy, grew a mere 0.1 percent, much slower than an earlier reading of 0.3 percent growth.
Capital spending remained unchanged, up 1.5 percent.
Imports jumped 5.2 percent, unchanged from their earlier reading, while exports were up 2.1 percent, faster than the 1.9 percent previously reported.
In the current quarter ending this month, intense yen-selling pressure has eased as financial markets pare back expectations of aggressive rate hikes by the U.S. Federal Reserve.
Still, economists say the prospect of slowing global growth caused by monetary tightening to fight surging inflation bodes ill for the Japanese economy, as the United States and China, which has its own growth concerns due to its strict COVID policy and real estate troubles, are the country’s two biggest trading partners.
