Japanese economy contracts 0.3% in the third quarter of 2022

The japanese economy it contracted 0.3% in the third quarter of 2022 due to the increase in the cost of imports and weak private consumption, according to official figures released on Tuesday.

The figure is lower than market projections, which expected growth of 0.3%. In the second quarter of the year, the Japanese GDP grew 1.1%.

The contraction came after three consecutive quarters of growth, after first-quarter figures were revised up.

The japanese business investment rose in the period, but private residential investment declined, while rising import costs offset growth in exports, according to the Japanese cabinet office.

Analysts anticipated a recovery in consumption, but acknowledged before the data was released that Japan would face difficulties in its trade balance given the high prices of basic products, such as oil, which make its imports more expensive.

The global economic slowdown, which “could be weighed down by monetary policy tightening, China’s zero COVID policy and geopolitical uncertainty,” is another negative for Japan, according to USB economists Masamichi Adachi and Go Kurihara.

Japanese Prime Minister Fumio Kishida announced a $260 million stimulus package in October to counter the inflationary impact and the weak yen.

The Japanese currency has depreciated from 115 to the dollar before the Russian invasion of Ukraine to around 140 on Tuesday.

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