Japanese economy shrinks in first quarter of 2018

17 May 18

Japan’s economy shrank in the first quarter of 2018 for the first time in two years, official data has shown.

The third biggest economy in the world contracted at an annualised rate of 0.6% from January to March this year, ending the longest stretch of growth since the 1980s.

The growth was forecast for an annualised contraction of 0.2%. These rates refer to the growth rate for one year, calculated using the rate for one quarter.

The economy shrank 0.2% with growth at 0.1% at the end of 2017, on a quarter-on-quarter basis.

This was largely driven by declines in investment and consumption, as well as weaker export.

But experts have said growth is expected to resume in the current quarter as global trade and Japanese exports pick up again.

Takeshi Minami, chief economist at Norinchukin Research Institute was quoted by : “This will not be a turning point – but is temporary.”

Bloomberg economist Yuki Masujima also said: “"The economy still looks fairly healthy after two years of expansion, and the outlook is for a rebound in 2Q, supported by stronger production and exports, as well as faster wage gains.”

 

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