Japan’s economy contracted slightly faster than anticipated in the Q3, as a sharp increase in local COVID-19 cases hampered private consumption.
- The significant contraction is a massive setback for policymakers seeking to ease supply shortages, and loosened pandemic restrictions would support recovery.
- Japan’s economy dropped by an annualized 3.6% in July-September, worse than the preliminary feature of a 3.0% contraction.
- The figure, which was worse than economists’ median outlook for a 3.1% decline, matches a real quarter-on-quarter drop of 0.9% from the prior quarter compared to a preliminary 0.8% contraction.
- Atsushi Takeda, the chief economist at Itochu Economic Research Institute, stated that the data confirms the economic conditions were flattening in the July-September quarter.
- Takeda further noted that growth turned negative on the resurgence of the COVID-19 variants.
The decline was largely due to a significant decrease in private consumption, which accounts for more than 50% of gross domestic product, and contracted 1.3% from the last quarter.
Nikkei 225 up +1.42%, JPY USD down -0.15%Source: The Cabinet Office