17 Aug 2015
Japan’s Q2 GDP contracts to 0.4% for the 1st time since 2014 Q4
FXStreet (Mumbai) - Japan's economy contracted in the June quarter as exports fell sharply and consumption was weak, according to preliminary GDP figures on Monday.
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
The main contributors to the decline in output were net exports and private demand, while a rise in fixed capital formation helped to offset the contraction, adding 0.2 percentage points to GDP growth.
Exports tumbled 4.4% over the quarter, while private consumption fell 0.8%, taking 0.4 percentage points from GDP.
On an annualized basis, the economy contracted 1.6%, after expanding 3.9% in the March quarter.
Inventories, which helped to boost growth in the March quarter, were flat in the June quarter, adding only 0.1 percentage points to GDP.
Kazuhiko Ogata, an economist at Credit Agricole SA, noted before the data release, “A contraction would cause huge damage to Abe’s popularity; Abe has had support because he’d improved the economy. It’s possible that he compiles an economic package.”
GDP growth fell 0.4% in the June quarter, the first estimate from Japan's Cabinet Office showed on Monday, coming in slightly stronger than the market forecast of a 0.5% contraction, but turning around sharply from the first-quarter expansion of 1.0%.
The main contributors to the decline in output were net exports and private demand, while a rise in fixed capital formation helped to offset the contraction, adding 0.2 percentage points to GDP growth.
Exports tumbled 4.4% over the quarter, while private consumption fell 0.8%, taking 0.4 percentage points from GDP.
On an annualized basis, the economy contracted 1.6%, after expanding 3.9% in the March quarter.
Inventories, which helped to boost growth in the March quarter, were flat in the June quarter, adding only 0.1 percentage points to GDP.
Kazuhiko Ogata, an economist at Credit Agricole SA, noted before the data release, “A contraction would cause huge damage to Abe’s popularity; Abe has had support because he’d improved the economy. It’s possible that he compiles an economic package.”