The Japanese economy registered an annualized contraction of 7.1% in the fourth quarter of 2019, a much worse figure than the 6.3% drop initially estimated, after the VAT increase last October and due to the effect of typhoons and the slowdown in global demand.
This is the largest decline in Japan’s GDP since the second quarter of 2014, when the economy was also burdened by a VAT increase and registered an annualized contraction of 7.4%.
In quarterly terms, Japan’s GDP recorded a contraction of 1.8% between October and December, two tenths worse than the first estimate of -1.6%, after growing 0.1% in the third quarter, 0,5% in the second quarter and 0.6% in the first three months of 2019.
Among the main factors that have fueled this downward revision of growth in Japan, the worsening of private non-residential investment stands out with a fall of 4.6%, compared to the decrease of 3.7% previously estimated.
Also, gross fixed capital formation registered a 3.2% decline in the quarter, six tenths worse than estimated, while public investment increased 0.7%, compared to 1.1% of the first estimation.
K. Tovar
Source: Publico
