Japan in recession as GDP shrinks 1.8 per cent in July-Sept
09 Dec 2008
Japan's real economy shrank 1.8 per cent on an annual rate in the July-September quarter, falling for the second straight quarter, latest government data on the country's gross domestic product showed.
The data indicate the Japanese economy has entered a recessionary phase with two consecutive quarters of negative economic growth, the first time in seven years, the Cabinet Office said on Tuesday.
The contraction in the world's second largest economy was worse than expected as the global financial crisis hurt Japan's exports, forcing a downward revision of figures from -0.4 per cent to -1.8 per cent.
On a nominal basis, or at constant prices, Japan's economy contracted 0.7 per cent from the previous three months, or an annualised 2.7 per cent, in the July-September period, against the 0.5 per cent and 2.1 per cent in the earlier report released on 17 November.
Japan is now looking at more measures to bolster the economy through investments in public projects and social security, economic and fiscal policy minister Kaoru Yosano said.
The Cabinet Office attributed the overall weakness in the third quarter to a sharp pullback in corporate investment. Japanese companies are trying to reduce their inventories to cut running costs, it said.
Export-reliant Japan was also hurt by a deep slump in global demand for its cars and gadgets.
The slump is likely to deepen as the extent of the fall in export revenue unfolds.