Japan economy stagnates in 3rd quarter
TOKYO - Japan's economic recovery paused in the third quarter of 2012, government data showed Monday, adding to woes for Prime Minister Yoshihiko Noda ahead of an election which may come as early as within the year.
The nation's gross domestic product contracted an annualized real 3.5 percent from the previous quarter, with the Cabinet Office also downgrading the result for the final quarter of 2011 to negative territory. The poor performances fuel prospects that the government and the central bank will take additional stimulus measures.
The deceleration, widely expected by private-sector analysts, whose consensus was an average 4.1 percent contraction in a Kyodo News survey, reflected weakening in both domestic and external demands. Especially, exports slowed a real, or inflation-adjusted, 5.0 percent amid the global economic downturn.
Private consumption, the biggest component of Japan's GDP, also dragged down the economy, dropping 0.5 percent in the three months through September, compared with a downwardly revised minus 0.1 percent in the previous quarter, on diminished effects from the government's subsidy program for purchases of environmentally friendly vehicles. The stimulus measure ended in September.
Corporate capital spending fell 3.2 percent due largely to sluggish results among manufacturers such as carmakers, the Cabinet Office said.
Bucking downward pressures, housing investment grew 0.9 percent for the second straight quarterly gain, reflecting robust home building, while government spending increased 4.0 percent, up for the third straight quarter, on reconstruction work following last year's natural disaster in northeastern Japan.
The negative growth in the overall economy corresponded to a non-annualized 0.9 percent contraction, the first deceleration in three quarters. The government also downwardly revised the result for the October-December quarter of 2011 to minus 0.3 percent from an earlier reported plus 0.1 percent.
In nominal terms, or unadjusted for price change, the world's third-biggest economy shrank 0.9 percent, or an annualized 3.6 percent.
GDP deflator, a wider price gauge than the consumer price index, fell 0.02 percent, signaling the economy has remained under deflationary pressure.
Domestic demand pushed GDP lower by 0.2 percentage point while external demand, or net exports, trimmed it by 0.7 point.
Exports were the weakest in five quarters on the slowing world economy in the wake of the sovereign debt crisis in Europe, which spread negative impact outside the area through trade and financial channels, with emerging market economies such as China, Japan's biggest trading partner, seriously affected.
Japanese shipments to the United States, the European Union and Asia all decelerated. By product, vehicles and electronic devices were especially weak, the government said. Imports fell 0.3 percent, reflecting weaker domestic industrial output, as well as lower crude oil and other energy costs.