TOKYO, Japan – Japan’s economy contracted more than initially thought in the July-September quarter, revised official data showed Monday, December 8, confirming the world’s third largest economy sank into recession.
The economy contracted 0.5% quarter-on-quarter, worse than the 0.4% shrinkage estimated in initial data released three weeks ago, the Cabinet Office said.
The reading was much worse than the median forecast of a 0.1% quarterly shrinkage in a survey by the Nikkei economic daily.
On an annualized rate, the economy shrank 1.9% against the initially estimated fall of 1.6%.
Two consecutive quarters of negative growth is commonly considered a recession.
Prime Minister Shinzo Abe’s pro-spending growth bid, dubbed “Abenomics”, has stalled as an April hike in the sales tax dented consumer spending and corporate investment.
Abe delayed a second tax hike planned for next year to 2017.
He also dissolved the lower chamber of parliament for snap elections on December 14, two years ahead of schedule, as he seeks to bolster his public support.
The tax rises are aimed at paying down Japan’s enormous national debt, but they have put Abe in a tricky position as he tries to balance them with his growth plan. – Rappler.com