TOKYO (AP) – Japan’s GDP contracted at a 1.1 percent annualized pace in the last quarter in further evidence the world’s third-largest economy is failing to gain traction despite unprecedented efforts by the central bank to spur more growth.
The revised figures released Tuesday compared with a 1.4 percent expansion in the July-September quarter. They showed a modest improvement over the previous estimate of a 1.4 percent contraction in October-December.
But the latest data suggest Japan’s growth has remained tepid in early 2016, raising the likelihood of further government action to help boost growth. That could include further moves by the Bank of Japan to encourage lending, extra government spending and possibly a second delay in a sales tax hike scheduled for April 2017.
“Companies have not been as downbeat about production in the month ahead since the 2008 recession. What’s more, consumer spending fell further in January as indicated by dips in ‘core’ household spending and retail sales,” Marcel Thieliant of Capital Economics said in a commentary.
In quarterly terms, the economy shrank 0.3 percent in the last quarter compared with a preliminary estimate of a 0.4 percent contraction.