Japan’s economy contracted in July-September, snapping two straight quarters of expansion on soft consumption and exports, complicating the central bank’s efforts to gradually phase out its massive monetary stimulus amid rising inflation.
Gross domestic product (GDP) in the world’s third-largest economy contracted 2.1% in the third quarter, government data showed on Wednesday (November 15), a much larger decline that a median market forecast for an annualised 0.6% fall. It followed an expansion of 4.5% in the previous quarter.
The weak reading reflects lacklustre consumption and capital expenditure, dashing policymakers’ hopes for a post-pandemic rebound in domestic activity to offset weaker external demand from China and elsewhere.
Consumption was flat in July-September after sliding 0.9% in the previous quarter, falling short of economists’ median estimate for 0.2% growth.