ID :
19292
Sat, 09/13/2008 - 09:59
Auther :
Shortlink :
https://oananews.org//node/19292
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April-June GDP posts largest contraction in nearly 7 yrs
TOKYO, Sept. 12 Kyodo - The Japanese economy shrank an annualized real 3.0 percent in the April-June quarter, revised downward from an initially reported 2.4 percent, to post the largest contraction in nearly seven years, the government said Friday.
It is the first shrinkage in four quarters in terms of gross domestic product and the sharpest annualized fall since a 4.5 percent dip logged in the July-September period of 2001, when the economy was damaged by the collapse of information technology bubble, the Cabinet Office said.
The downward revision from the initial figures was mainly attributed to weak
exports and capital spending trends underlined by fresh indicators that were
not reflected in the preliminary report issued on Aug. 13, a Cabinet Office
official said.
Finance Minister Bunmei Ibuki said the Japanese economy dwindled in sync with
global economic downturn triggered by the U.S. credit disruption. In some
sectors, firms have not fully passed surges in import prices on to consumers,
he added.
''Company managers are concerned about the future course of the economy and
thus they cannot increase capital spending,'' Ibuki said.
Economic and Fiscal Policy Minister Kaoru Yosano echoed Ibuki's view and said
that Japan will need to see an increase in employees' wages in order to boost
its domestic demand.
The fall in GDP for the second quarter of 2008 corresponds to the 0.7 percent
shrinkage from the January-March quarter, compared with a preliminary 0.6
percent contraction.
The latest GDP results beat the average market forecasts of a 3.5 percent
annualized decline and a 0.9 percent quarterly drop in a Kyodo News survey, but
signaled worsening economic conditions as both domestic and foreign demand
dragged down growth for the first time since the October-December period of
2004.
In the reporting quarter, external demand sent GDP down 0.06 percentage point,
revised downward from the initial 0.02 percentage point increase, mainly due to
weaker-than-expected exports.
Meanwhile, domestic demand pulled GDP down 0.7 point, compared with the initial
0.6 point.
The official said foreign demand negatively affected GDP for the first time
since the January-March quarter of 2004. The 0.06 point decline was the largest
since a 0.14 point decrease logged in the fourth quarter of 2004, the official
said.
Takahide Kiuchi, chief economist at Nomura Securities Co., said the revised GDP
data confirmed that Japan's economy has entered into a contraction phase, but
forecast that the downturn will be short-lived with recent falls in crude oil
prices and expected recovery in exports.
''I do not project consecutive negative growth for the July-September period
because economies in the rest of Asia will likely pick up with somewhat eased
inflationary pressure, contributing positively to Japan's exports,'' Kiuchi
said.
He projected that GDP will post an annualized real growth of about 1 percent in
the third quarter of 2008.
In the April-June period, the economy contracted 0.8 percent, or an annualized
3.3 percent, from the previous three months, on a nominal basis, or without
adjustment for price changes, against 0.7 percent and 2.7 percent shrinkage
marked in the preliminary report.
The nominal economy fell for the first time in two quarters and posted the
sharpest annualized decline since a 4.3 percent drop in the January-March
period of 2003.
The revised report showed that corporate capital spending decreased a real 0.5
percent, compared with an initially reported 0.2 percent dip.
Consumer spending, which accounts for about 55 percent of Japan's GDP, fell 0.5
percent, unchanged from the preliminary report.
Housing investment was down 3.5 percent, revised downward from an initial 3.4
percent slip.
Public investment dropped 5.1 percent, against the original 5.2 percent fall.
Exports shrank 2.5 percent, a cut from a 2.3 percent decline, while imports
shed 2.6 percent, upgraded from a 2.8 percent fall.
The GDP deflator, a key inflation gauge, dropped 1.5 percent from a year
earlier, revised downward from a 1.6 percent fall.
To achieve the government projection of a real 1.3 percent growth in fiscal
2008 through March next year, GDP will need to increase 0.7 percent in each of
the remaining three quarters from the previous three months, or an annualized
2.9 percent, the official said.
GDP is the total value of goods and services produced domestically. Real GDP
figures are adjusted for price and seasonal variations.
==Kyodo
It is the first shrinkage in four quarters in terms of gross domestic product and the sharpest annualized fall since a 4.5 percent dip logged in the July-September period of 2001, when the economy was damaged by the collapse of information technology bubble, the Cabinet Office said.
The downward revision from the initial figures was mainly attributed to weak
exports and capital spending trends underlined by fresh indicators that were
not reflected in the preliminary report issued on Aug. 13, a Cabinet Office
official said.
Finance Minister Bunmei Ibuki said the Japanese economy dwindled in sync with
global economic downturn triggered by the U.S. credit disruption. In some
sectors, firms have not fully passed surges in import prices on to consumers,
he added.
''Company managers are concerned about the future course of the economy and
thus they cannot increase capital spending,'' Ibuki said.
Economic and Fiscal Policy Minister Kaoru Yosano echoed Ibuki's view and said
that Japan will need to see an increase in employees' wages in order to boost
its domestic demand.
The fall in GDP for the second quarter of 2008 corresponds to the 0.7 percent
shrinkage from the January-March quarter, compared with a preliminary 0.6
percent contraction.
The latest GDP results beat the average market forecasts of a 3.5 percent
annualized decline and a 0.9 percent quarterly drop in a Kyodo News survey, but
signaled worsening economic conditions as both domestic and foreign demand
dragged down growth for the first time since the October-December period of
2004.
In the reporting quarter, external demand sent GDP down 0.06 percentage point,
revised downward from the initial 0.02 percentage point increase, mainly due to
weaker-than-expected exports.
Meanwhile, domestic demand pulled GDP down 0.7 point, compared with the initial
0.6 point.
The official said foreign demand negatively affected GDP for the first time
since the January-March quarter of 2004. The 0.06 point decline was the largest
since a 0.14 point decrease logged in the fourth quarter of 2004, the official
said.
Takahide Kiuchi, chief economist at Nomura Securities Co., said the revised GDP
data confirmed that Japan's economy has entered into a contraction phase, but
forecast that the downturn will be short-lived with recent falls in crude oil
prices and expected recovery in exports.
''I do not project consecutive negative growth for the July-September period
because economies in the rest of Asia will likely pick up with somewhat eased
inflationary pressure, contributing positively to Japan's exports,'' Kiuchi
said.
He projected that GDP will post an annualized real growth of about 1 percent in
the third quarter of 2008.
In the April-June period, the economy contracted 0.8 percent, or an annualized
3.3 percent, from the previous three months, on a nominal basis, or without
adjustment for price changes, against 0.7 percent and 2.7 percent shrinkage
marked in the preliminary report.
The nominal economy fell for the first time in two quarters and posted the
sharpest annualized decline since a 4.3 percent drop in the January-March
period of 2003.
The revised report showed that corporate capital spending decreased a real 0.5
percent, compared with an initially reported 0.2 percent dip.
Consumer spending, which accounts for about 55 percent of Japan's GDP, fell 0.5
percent, unchanged from the preliminary report.
Housing investment was down 3.5 percent, revised downward from an initial 3.4
percent slip.
Public investment dropped 5.1 percent, against the original 5.2 percent fall.
Exports shrank 2.5 percent, a cut from a 2.3 percent decline, while imports
shed 2.6 percent, upgraded from a 2.8 percent fall.
The GDP deflator, a key inflation gauge, dropped 1.5 percent from a year
earlier, revised downward from a 1.6 percent fall.
To achieve the government projection of a real 1.3 percent growth in fiscal
2008 through March next year, GDP will need to increase 0.7 percent in each of
the remaining three quarters from the previous three months, or an annualized
2.9 percent, the official said.
GDP is the total value of goods and services produced domestically. Real GDP
figures are adjusted for price and seasonal variations.
==Kyodo
