(Reuters) - Japan's economy shrank a record 4.0 percent in the first quarter as domestic demand and investment buckled, threatening to crush any export-led rebound later this year.
The data did add to growing evidence that global trade may have bottomed out in the first quarter. Net exports proved to be less of a drag on the world's second-largest economy than in the previous three months, and companies ran down inventory.
While that lent support to the growing chorus of forecasts that the global economy was pulling out of the dive triggered by the financial crisis, there were grim signals on the outlook for Japan, where GDP is shrinking twice as fast as in the United States.
The GDP contraction was slightly less the 4.2 percent median forecast in a Reuters poll, but private consumption and capital spending fared worse than analysts had expected.
Private consumption dropped 1.1 percent, compared with 0.8 percent in the previous quarter. The forecast was for a decline 0.9 percent. Capital spending shrank 10.4 percent versus 6.7 percent in the previous three months and an 8.1 percent forecast.
"Weaker-than-expected figures for capex and private consumption suggest the negative impact from the export plunge is spreading to domestic demand," said economist Hiroshi Shiraishi at BNP Paribas.
"As such, the Japanese economy may return to growth temporarily but it could suffer a contraction again afterwards."
Read more here
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment