Japan’s economy is likely to have contracted in the first three months of 2024, partly due to disruptions at automakers, clouding growth prospects as the central bank tries to determine the right pace for policy normalization.
A government report on Thursday is expected to show that gross domestic product (GDP) shrank by an annualized 1.2% in the three months through March, according to economists polled by Bloomberg. Preliminary figures are expected to show that consumer and business spending have fallen, while net exports have put a brake on growth for the first time in a year.
“The result will likely show that Japan’s economy has come to a standstill,” Yoshiki Shinke, a senior executive economist at the Dai-Ichi Life Research Institute who has won awards for forecasting, wrote in a May 10 note. “The main reason for the contraction is the significant reduction in car production” after a verification certification scandal broke out at Daihatsu.
