This picture taken on May 15, 2018 shows passersby moving on a concourse in an underground shopping district in Tokyo. -AFP
Japan's economy slid into reverse for the first time in two years at the beginning of the year, hit by sluggish consumption and a winter cold snap, but analysts predicted the world's third-largest economy would quickly rebound.
The economy contracted by 0.2 percent quarter-on-quarter in the January-March period, compared with growth of 0.1 percent at the end of 2017, the Cabinet Office said Wednesday. This brought to an end a series of eight consecutive quarters of growth, a winning streak not seen since the heady days of the "miracle" boom of the 1980s when the Japanese economy ruled the world.
The data will come as a blow for the vaunted "Abenomics" policies of Prime Minister Shinzo Abe, who is already under pressure over a series of scandals. But experts said they expected a pause in the growth trend rather than a prolonged downswing.
"There were one-off special factors in the January-March period, ranging from stock market sell-offs to higher vegetable prices due to bad weather," said Takeshi Minami, chief economist at Norinchukin. The yen also strengthened against other major currencies on safe-haven buying, clouding the prospects for Japanese exporters.
"There are worries about some emerging economy markets but the global economy as a whole is likely to continue its recovery for some more time. (Japan's) GDP will likely come back to positive growth in April-June," Minami told AFP. The economy was stalled by stagnant private consumption, which was flat in the January to March period after an uptick of 0.2 percent in the final quarter of last year.
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