Japan’s Economy Contracted in 3Q
TOKYO (AP) _ Japan’s economy shrank 0.6 percent in the July-September quarter, the government said Thursday, in a sign the country’s rebound from a lengthy slowdown is stalling.
The gross domestic product data were revised from a preliminary announcement in December of 0.2 percent growth, handing the world’s second largest economy its first quarter of contraction since October-December of 1999.
The government’s announcement raises concerns that Japan may not meet its target for 1 percent growth this fiscal year _ which could prove troubling for embattled Prime Minister Yoshiro Mori, who has promised to usher in an era of growth.
Mori, whose approval ratings have dropped to 14 percent, is already under pressure from recent scandals that have shaken public support for his government.
Data had indicated that the economy was no longer shrinking, though it had yet to attain steady growth. But Thursday’s figures show Japan has not managed to pull out of its deepest economic slump in decades and throw into question Mori’s ability to lead a turnaround.
The revisions, the most significant made to GDP figures since 1978, indicate that corporate Japan is not making a significant contribution to getting the economy back on track.
Business investment increased 1.5 percent in the July-September quarter from the previous one _ far weaker than the 7.8 percent growth in the preliminary data. The slower growth suggests that corporations, a driving force of the economy, are not investing in new equipment and machinery as aggressively as economists had believed.
Personal consumption remained flat from the previous quarter in the revised data, indicating that worries about a wobbly stock market and wave of corporate restructuring continue to discourage consumers from spending.
Stagnant spending, which accounts for roughly 60 percent of GDP, has been a major drag on the economy.