Doha: Japan’s economy shrank 2.3% year-on-year in the July-September quarter, revised down from the preliminary estimate of a 1.8% contraction, as weakening business investment and export softness weighed on growth amid uncertainty over rising US tariffs.
According to Qatar News Agency, the Cabinet Office said real gross domestic product (GDP), adjusted for inflation, declined 0.6% quarter-on-quarter, worse than the initial estimate of a 0.4% fall. This marked Japan’s first economic contraction in six quarters.
The downturn was driven by exceptional factors, including a slowdown in exports. Economists expect exports to recover in the October-December quarter, supported by hopes of a potential easing in US tariff pressure following negotiations with President Donald Trump’s administration.
In the latest breakdown, capital spending fell 0.2% in the three months to September, sharply revised down from a previously reported 1.0% increase. Public investment was revised to a 1.1% decline, compared with an earlier estimate of a 0.1% rise.
Private consumption, which accounts for more than half of Japan’s GDP, grew 0.2%, slightly higher than the previously reported 0.1% expansion, though the pace remained weak as persistent inflation continued to curb household spending.
On the external front, exports fell 1.2%, unchanged from the preliminary estimate, while imports declined 0.4%, following a 0.1% drop previously reported, as the weaker yen pushed up import costs.
Meanwhile, nominal GDP contracted at an annualized rate of 0.2%, revised down from an earlier estimate showing a 0.5% increase.