Japan Economy Shrinks 1.8 ％ in 1st Quarter: Revised Report

Jiji Press

17:43 JST, June 10, 2024

TOKYO (Jiji Press) — Japan’s economy shrank at an inflation and seasonally adjusted annualized rate of 1.8% in the first three months of the year, marking the first negative growth in two quarters despite an upward revision from an initial estimate, a revised report from the Cabinet Office showed Monday.

A reduction on vehicle production stemming from test fraud involving Daihatsu Motor Co. weighed on corporate capital spending, personal consumption and exports, signaling that the country’s economic recovery has been stalled. The preliminary report released last month showed the country’s gross domestic product dropped at an annualized rate of 2.0% in the January-March period.

The government expects to see a moderate improvement in economic output, Chief Cabinet Secretary Yoshimasa Hayashi said at a press conference.

Corporate capital expenditures fell 0.4% from the October-December period, marking the first decline in two quarters, though better than a 0.8% fall in the preliminary report after reflecting strong data released earlier this month.

Personal consumption, the main pillar of domestic demand, declined 0.74%, the fourth straight quarter of drop, compared with the preliminary reading of a 0.68% fall. Spending on phones, expressways, games and nonalcohol beverages declined.

Public investment grew 3.0%, against the preliminary reading of a 3.1% increase.

Exports fell 5.1%, against the preliminary reading of a 5.0% decline, and imports were down 3.3%, compared with a 3.4% fall.

In nominal terms, GDP grew at an annualized rate of 0.1%, against a 0.4% gain in the preliminary report.

In fiscal 2023, which ended March, real GDP rose 1.2% from the previous year, unchanged from the preliminary estimate, to a record high of ¥558 trillion.