Japan’s Economy Contracts in the Third Quarter Pushing it into Recession
The economists' predictions turned out to be true for Japan as the country's economy fell into a recession. In the third quarter, the economy contracted with a drop in business investments. It's the second time the nation is facing a recession after Prime Minister Shinzo Abe joined office in 2012 end.
In the quarter that ended on September 30, Gross domestic product dropped at an annual rate of 0.8 percent, after a revised 0.7 decline noted in the second quarter. That meets the general definition of what is called recession. The forecast of the economists said the drop will be0.2 percent in the third quarter.
The slow growth in industrial activities in China as well as the weaker outlook globally gave a reason to the companies in Japan to hold back their production along with the spending.
However, even though it is expected that the growth will pick up in the present quarter, the GDP report might become a cause of pressure on Shinzo Abe and BOJ's Governor Haruhiko Kuroda to add further monetary stimulus. Later in the week, the Bank of Japan is scheduled to hold a meeting.
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