- Atsushi Takeda, an economist at Itochu Corp.
The Japanese economy slipped back into recession in the third quarter as uncertainty surrounding the overseas outlook undermined business investment, putting policy makers under increasing pressure to deploy new stimulus measures to prop up a fragile recovery the world's third biggest economy. Japan's gross domestic product dropped an annualized 0.8% in the three months ended September 30, after a revised 0.7% decline in the second quarter. Economists, however, had predicted a milder 0.2% decrease of the nation's economic output. On a quarter-on-quarter basis, the economy contracted 0.2% in the July-September period. The economy slid into its second recession since Prime Minister Shinzo Abe took office in December 2012.
Private consumption, which makes up around 60% of the economy, gained 0.5% from the preceding quarter, while capital expenditure dropped 1.3%, marking a second consecutive quarter of drops. External demand added 0.1 percentage point to GDP growth, whereas domestic demand shaved 0.3 point off growth. The dismal data would be of little surprise to the BoJ, which had factored in the recession and predict growth to rebound in the coming quarters.
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