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TOKYO (AP) – The Japanese economy contracted at an annualized rate of 1.2% in July-September, as consumer spending, investment and exports fell, according to government data published Wednesday.
Cabinet Office preliminary data showed that the seasonally adjusted gross domestic product – the total value of goods and services in a country – plunged 0.3% in the third quarter from the previous quarter.
Growth in the world's third-largest economy led to a decline in trade, with exports declining 1.8% and imports down 1.4%, according to the data. Consumer spending and business investment also declined.
The economy grew in the previous quarters of April to June, but declined in the previous quarter. This contraction in the first quarter ended the longest period of consecutive expansion for Japan for nearly three decades.
Harumi Taguchi, chief economist at HIS Markit in Tokyo, said the third quarter's natural disasters had weighed on travel and consumer spending, allowing growth to pick up if such disasters did not happen. during the last quarter.
The closure of a large airport in western Kansai after the passing of a typhoon is one of the natural disasters that have reduced growth, he said. A major earthquake also hit the northernmost island of Hokkaido during the quarter, causing deadly landslides and widespread power outages.
Until recently, Japan maintained moderate growth under Prime Minister Shinzo Abe's "Abenomics" policy, which was based on a stimulus package aimed at fighting deflation.
But other factors are hurting the economy, such as the persistent labor shortage and low wage growth in the country.
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Yuri Kageyama is on Twitter at https://twitter.com/yurikageyama
On Instagram at https://www.instagram.com/yurikageyama/?hl=en
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