• search

For the first time in two years, Japan's economy shrinks

By PTI
Subscribe to Oneindia News
For Quick Alerts
ALLOW NOTIFICATIONS
For Daily Alerts

    Tokyo, May 16: Japan's economy shrank for the first time in two years in the first quarter of the year amid weak consumption, official data showed on Wednesday (May 16). The world's third-largest economy contracted by 0.2 per cent quarter-on-quarter in the January-March period, compared with growth of 0.1 per cent at the end of 2017, the Cabinet Office said.

    Image for representation only

    Private consumption was flat after an uptick of 0.2 per cent in the final quarter of last year. Private residential investment plunged another 2.1 percent after a 2.7 percent fall in the previous quarter.

    "It is certain that the heavy snowfall in January and February and rises in fresh vegetable prices reduced disposable income but still (private consumption) is weak," said SMBC Nikko Securities chief market economist Yoshimasa Maruyama.

    Consumers will keep purse strings tight "unless the pace of wage increases shows a clear acceleration", he said in a commentary released ahead of the data release. But economists believe the drop would be temporary.

    "The weak Q1 GDP growth is a one-off event as weak personal consumption coincided with other special factors," said Katsunori Kitakura, lead strategist at Sumitomo Mitsui Trust Group.

    "The Japanese economy should see a modest recovery buoyed by the global economy, with exports in particular benefiting from this, helping Japan's GDP revert back to an uptrend from Q2 2018 onwards," he said in a commentary earlier this week.

    PTI

    For Breaking News from Oneindia
    Get instant news updates throughout the day.

    X
    We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Oneindia sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Oneindia website. However, you can change your cookie settings at any time. Learn more