(Details on Japan’s economy, adds background)
* Q3 GDP per annum -3.0% vs f’cast -0.8%
* Fall in business spending, consumption hurt economy in Q3
* Economic outlook likely to be brighter in Q4
TOKYO, Nov 15 (Businesshala) – Japan’s economy shrank in the third quarter, data showed on Monday, as global supply disruptions and a resurgence in COVID-19 cases took a toll on business spending and consumption.
Many analysts expect the world’s third-largest economy to recover in the current quarter as consumer spending and production pick up after the health crisis eases in Japan and across Asia.
The economy shrank 3.0% annually in July-September after a revised 1.5% gain in the first quarter, compared to the average market forecast for a 0.8% contraction, preliminary gross domestic product (GDP) data showed.
The weak GDP is in contrast to other advanced countries such as the United States, which saw their economies expand by 2.0% in the third quarter thanks to strong demand.
The data showed that on a quarter-on-quarter basis, GDP fell 0.8% compared to the market’s forecast of a 0.2% decline.
Consumption fell 1.1% in July-September as compared to the previous quarter after rising 0.9% in April-June.
Capital expenditure also declined by 3.8% after rising a revised 2.2% in the previous quarter, the data showed.
Domestic demand declined 0.9% points to account for GDP growth.
Exports declined 2.1% in July-September compared to the previous quarter, a sign that the global recovery continues to support the economy.
Analysts polled by Businesshala expect Japan’s economy to expand 5.1% annually in the current quarter, thanks to a decline in consumer activity and auto output as COVID-19 cases and easing supply disruptions.
Japanese firms still face risks from supply constraints such as high commodity costs and global chip shortages, which threaten to undermine the economic outlook in the short to medium term. (Reporting by Daniel Lusink and Tetsushi Kajimoto; Editing by Sam Holmes)