Japan's economy shrank as expected in Q1
TOKYO--Japan's economy shrank at an annualized pace of 0.6% in the January-March quarter, the same pace as initially estimated, as stronger-than-expected capital expenditures failed to offset weakness in private consumption, government data showed Friday.
In non-annualized terms, the economy contracted 0.2% from the previous quarter, unchanged from the preliminary figure. Given a less pessimistic view of companies' spending shown in the ministry of finance's data released last week, economists had expected Friday's results to show smaller contractions.
The first-quarter contraction ended the world's third-biggest economy's longest growth streak in 28 years. While many economists expect the economy to rebound in the April-June quarter, there also remains a risk that Japan falls into a technical recession--which is defined as two consecutive quarters of contraction.
Private sector capital spending rose 0.3% from the previous quarter, compared with an initial estimate of a 0.1% fall.
The revised figures show that domestic demand dragged 0.2 percentage point from growth in the January-March quarter. Meanwhile, net external demand added 0.1 percentage point to growth in the quarter.
Inventories also subtracted 0.2 percentage point from growth, compared with a 0.1% drag in the preliminary data.
Write to Megumi Fujikawa at email@example.comSource: Google News Japan | Netizen 24 Japan