Japan’s economy shrank in the July-September period for the first time in four quarters, provisional government data showed Wednesday, amid slowing global demand and rising domestic inflation.
Provisional gross domestic product fell 2.1% in the third quarter compared to a year ago, while also recording a 0.5% decline from the previous quarter.
Economist surveyed by Reuters had expected the world’s third-largest economy to post an annualized 0.6% decline and a quarter-on-quarter 0.1% contraction in the July-September quarter.
The decline is part of an unstable trend since the start of the Covid-19 pandemic in early 2020 that has seen periods of economic expansion alternating with contraction.
It underscores the complex challenges for the Bank of Japan as Governor Kazuo Ueda contemplates an eventual exit from its ultra-easy monetary policy, while bolstering the Japanese government’s 13.2 trillion yen ($87 billion) economic package that will feature subsidies and payouts to low-income households to mitigate soaring energy and utility bills and aimed at curbing rising living costs.
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