Japan’s gross domestic product (GDP) shrank at 1.8 per cent in inflation-adjusted annualised terms in the first quarter (Q1) this year compared with a 2-per cent shrink reported in preliminary data, the Cabinet Office said today. An upward revision in corporate capital investment was the reason behind this.

The Q1 2024 negative growth was the first contraction in two successive quarters.

Capital investment was revised up to minus 0.4 per cent from minus 0.8 per cent. Private consumption—accounting for more than half of the GDP—remained unchanged at minus 0.7 per cent.

Exports came in one-tenth of a point lower at minus 5.1 per cent, while imports were one-tenth of a point better at minus 3.3 per cent, according to domestic media outlets. Inventories added 0.3 percentage point to growth.

Both consumers and companies are cutting back on spending and unsold supplies are building up in warehouses because of the strongest inflationary trend in decades, the data shows.

Personal consumption data were left unchanged at minus 0.7 per cent, marking a fourth quarter of declines, while business spending figures were revised to minus 0.4 per cent from a preliminary drop of 0.8 per cent.

A rebound in growth in this quarter is widely expected.

Fibre2Fashion News Desk (DS)

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Q1 2024 Japan GDP shrank less than earlier thought, Q2 rebound likely

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