The Japanese economy shrank slightly more than initially expected in the third quarter, as the rapid rise in coronavirus cases hit private consumption and a global shortage of processors hit the corporate climate.
The deeper contraction is a setback for policymakers who hope that easing food shortages and easing pandemic constraints will support recovery in the world’s third-largest economy this quarter.
Japan’s economy shrank 3.6% year-on-year in July-September, compared with initial estimates of a 3% contraction.
The figures, which were worse than economists’ average estimates for a 3.1% drop, equate to a real quarterly contraction of 0.9% compared to the previous quarter, compared to an initial drop of 0.8%.
“This confirms that economic conditions were stagnant in July-September,” said an economist at the Itochu Economic Research Institute.
“Growth has been negative due to the coronavirus resurgence.”
The faster decline is mainly attributed to the larger decline in private consumption, which corresponds to more than half of GDP, and fell 1.3% from the previous quarter, compared to an initial estimate of a decline of 1.1%.
Expenditure on durable goods fell the most since 1994, when comparable data first became available, falling 16.3% on a quarterly basis, and reducing household consumption by 0.7%.
The data also showed that public investment fell 2% compared to the initial estimate for a fall of 1.5%, while capital expenditures fell less, falling 2.3% from the previous quarter, compared to initial estimates of 3.8%. .
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Source From: Capital
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