Japanese economy shrinks 1.8% in first quarter: revised report

TOKYO (Jiji Press) – Japan’s economy shrank at an annualized inflation and seasonally adjusted rate of 1.8% in the first three months of the year. The Cabinet Office showed this on Monday.

A reduction in car production due to test fraud involving Daihatsu Motor Co. involved weighed on corporate capital expenditure, private consumption and exports, indicating that the country’s economic recovery has stalled. The preliminary report published last month showed that the country’s gross domestic product fell by 2.0% year-on-year in the January-March period.

The government expects a moderate improvement in economic output, Chief Cabinet Secretary Yoshimasa Hayashi said at a news conference.

Business investment fell 0.4% from the October-December period, marking the first decline in two quarters, but better than a 0.8% decline in the preliminary report, following strong data released earlier this month .

Personal consumption, the mainstay of domestic demand, fell 0.74%, the fourth consecutive quarter of decline, compared with a preliminary decline of 0.68%. Spending on phones, highways, games and non-alcoholic drinks fell.

Government investments increased by 3.0%, while an increase of 3.1% was initially expected.

Exports fell 5.1%, compared to a 5.0% decline for the time being, and imports fell 3.3%, compared to a 3.4% decline.

In nominal terms, GDP grew by 0.1% year on year, up from 0.4% in the preliminary report.

In the 2023 fiscal year, which ended in March, real GDP rose 1.2% from the previous year, unchanged from the preliminary estimate, to a record high of ¥558 trillion.