HONG KONG — Japan confirmed on Wednesday what many had long suspected: that the world’s second-largest economy contracted at a record pace during the quarter that ended March 31, as exports collapsed and companies cut back production.
Japan’s gross domestic product shrank 15.2 percent from the same period a year earlier, marking a fourth straight quarter of contraction and the biggest decline since Japan began keeping records in 1955.
Japan’s gross domestic product shrank 15.2 percent from the same period a year earlier, marking a fourth straight quarter of contraction and the biggest decline since Japan began keeping records in 1955.
It was also a deeper fall than during the previous three months, when the economy shrank a revised 14.4 percent from the year-earlier period.
With shipments of overseas goods down 26 percent from the previous quarter, export-dependent Japan has been harder hit than the United States and Europe as overseas demand evaporated amid the global economic turmoil.
Japan’s contraction from the previous quarter – 4 percent – compares to a 1.6 percent shrinkage in the United States and 2.5 percent in the euro zone.
In addition, domestic demand, which has long been feeble because of high household savings rates and years of anemic growth even prior to the financial crisis, is expected to remain poor as the worsening labor market depresses sentiment, analysts said.
Still, other recent statistics indicate that the January-March quarter may have marked a low point, possibly setting the stage to a return to growth, albeit modest and fragile.
The decline in exports is at least slowing, and Japan’s industrial output in March rose for the first time in six months and at a far faster pace than analysts had expected, data released at the end of April showed.
And on Wednesday, the car maker Mazda Motor said it would cancel an earlier plan to idle a plant for two days next month, providing anecdotal evidence of the gradual stabilization.
In addition, economists expect a plethora of government stimulus measures to bolster growth as the year progresses.
“While the economy will continue to be in a severe state, I expect less pressure from inventory adjustments and the stimulus package to provide support,” Japan’s economy and fiscal policy minister, Kaoru Yosano, said Wednesday, Bloomberg News reported.
The Japanese stock market shrugged off the G.D.P. data. The benchmark Nikkei 225 index was 0.4 percent higher by midday.
With shipments of overseas goods down 26 percent from the previous quarter, export-dependent Japan has been harder hit than the United States and Europe as overseas demand evaporated amid the global economic turmoil.
Japan’s contraction from the previous quarter – 4 percent – compares to a 1.6 percent shrinkage in the United States and 2.5 percent in the euro zone.
In addition, domestic demand, which has long been feeble because of high household savings rates and years of anemic growth even prior to the financial crisis, is expected to remain poor as the worsening labor market depresses sentiment, analysts said.
Still, other recent statistics indicate that the January-March quarter may have marked a low point, possibly setting the stage to a return to growth, albeit modest and fragile.
The decline in exports is at least slowing, and Japan’s industrial output in March rose for the first time in six months and at a far faster pace than analysts had expected, data released at the end of April showed.
And on Wednesday, the car maker Mazda Motor said it would cancel an earlier plan to idle a plant for two days next month, providing anecdotal evidence of the gradual stabilization.
In addition, economists expect a plethora of government stimulus measures to bolster growth as the year progresses.
“While the economy will continue to be in a severe state, I expect less pressure from inventory adjustments and the stimulus package to provide support,” Japan’s economy and fiscal policy minister, Kaoru Yosano, said Wednesday, Bloomberg News reported.
The Japanese stock market shrugged off the G.D.P. data. The benchmark Nikkei 225 index was 0.4 percent higher by midday.
No comments:
Post a Comment