Japanese GDP Shrinks Pushing Country Towards Recession
By Prasanth Aby Thomas | November 12, 2012 5:38 PM EST
Data from the country's Cabinet Office showed that the Gross Domestic Product (GDP) contracted 0.9 percent from July to September while dropping 3.5 percent on an annualised basis.
Weak external demand accounted for 0.7 percent of the quarterly contraction. Slowing global economy and the territorial disputes with China that sparked a boycott of Japanese goods in the Communist nation had pulled exports down 5 percent in the third quarter.
Private consumption slipped 0.5 percent. Capital expenditure fell 3.2 percent as firms held a negative outlook on weak external and internal markets.
The latest data follows a host of other weak economic indicators from the country, prompting concerns that Japan may be easing into recession.
According to a survey by Bloomberg, the economy may shrink further in the current quarter. Two consecutive quarters of economic contraction is commonly considered as an indicator of recession.
"The GDP data confirms that the economy has fallen into a recession," Tatsushi Shikano, senior economist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo told Reuters. "It is set for a second straight quarter of contraction in the current quarter."
The figures are expected to pile more pressure on the Bank of Japan to initiate further monetary aiding measures. The central bank had boosted its asset purchase programme for the second straight month in October.
However, many analysts expect the BoJ to refrain from further measures as it meets in the coming week, although some speculate that the bank may consider a stimulus in December after a meeting of the US Federal Reserve.
Japanese Prime Minister Yoshihiko Noda told parliament that "the GDP figures were grim". He has vowed to speed up the government's efforts to boost the economy.
To contact the editor, e-mail:
Most Popular Slideshows
- Still The World Champions: Team USA Overpowers Serbia, 129-92 To Win 2014 FIBA World Cup [PHOTOS]
- Pope Francis: World War III Has Started On Piecemeal
- After Win Over Maidana, Mayweather Says He Is Prepared To Negotiate A Fight With Pacquiao
- From Fat To Fit: Celebrities Who Were Overweight Before They Became The Beauties That They Are
Join the Conversation
- West Africa Ebola Epidemic To Last 12-18 Months More
- Security for Pope Francis' Albania Trip At Status Quo, Won’t Be Reinforced Despite ISIS Threat – Vatican
- Air France Pilots’ Strike: Only 40% of Scheduled Wednesday Flights Will Operate
- Venezuelans Using Made-in-China Silicones Because Of Breast Implant Shortage
- BC Teachers’ Strike Reaches Tentative Deal With Government, Date of Class Resumptions Still Not Sure
- Samsung Attacks iPhone 6 Plus Through New Galaxy Note 4 Commercial: Apple Claims Imitating Galaxy Note Phablets
- Pregnant Kate Middleton May Call Off Malta Trip Due To Sickness: Royal Couple Will Move To Anmer Hall Residence
- HTC ‘Double Exposure’ Event On October 8 Could Unveil HTC Eye With 5.2-inch FHD Display
- Apple iOS 8 Can Trump Google Android 5.0 L Upon September 17 Release
- Ukraine Crisis: Poland Denies Supplying Weapons To Kiev
- Twitter Photo Of British Medical Muslima Student Holding Severed Head
- Google Nexus 8 Release Date Countdown Begins Oct 8: 8 Killer Specs and Features to Expect