TOKYO, Sept 10 (AFP): Japan's economy contracted by 0.3 per cent in the three months to June from the previous quarter as firms cut spending on new factories and equipment, the government said today.
Japan's gross domestic product (GDP) shrank by 1.2 per cent on an annualised basis, the cabinet office said, worse than an initial estimate of positive quarter-on-quarter growth of 0.1 per cent for an annualised rate of 0.5 per cent.
It was the first contraction in three quarters for Japan, which has been slowly recovering after falling into the economic doldrums in the early 1990s.
The government revised past GDP estimates to show that the economy shrank by 0.1 per cent in the third quarter of 2006.
The latest contraction had been expected after a survey used to calculate the GDP revisions last week showed that capital investment by Japanese companies fell in the three months to June for the first time in 17 quarters.
Analysts said that a change in sample size of the survey had likely affected the result.
The economy should return to positive growth in the third quarter of 2007 but the pace may be sluggish due to the weakness of the US economy, said Taro Saito, a senior economist at NLI Research Institute said.
Japan's economy shrinks 0.3pc in quarter to June
FE Team | Published: September 11, 2007 00:00:00 | Updated: February 01, 2018 00:00:00
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