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Japan’s economy shrinks 28% in 2Q, worse than 1st estimate – News 1130

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TOKYO — Japan’s economy shrank at a record, even worse rate in the April-June quarter than initially estimated.

The Cabinet Office said Tuesday Japan’s seasonally adjusted real gross domestic product contracted at an annualized rate of 28.1%, worse than the 27.8% figure given last month.

The coronavirus pandemic, which has people staying home, restaurants and stores empty or closing, and travel and tourism nose-diving, has hurt all the world’s economies and many companies. But it has slammed Japan’s export-reliant economy.

Restoring growth will be a priority as the country prepares to choose a new leader to replace Prime Minister Shinzo Abe, who is resigning for health reasons. A vote among governing party members is expected next week.

Other data released Tuesday showed cash earnings improving somewhat, and consumer spending and other business activity is expected to rebound following the sharp drops as the country sought to bring the coronavirus pandemic under control.

“However, high-frequency data show that growth is struggling to gain pace, suggesting a very gradual and protracted recovery after the initial bounce. The near-term outlook therefore remains challenging,” Oxford Economics said in a commentary.

Quarter-on-quarter, the economy contracted 7.9%, according to the revised figures, down from 7.8% in the preliminary data.

The annual rate shows what the number would have been if continued for a year.

The Cabinet Office said the government began keeping comparable records in 1980. The previous worst contraction, a 17.8% drop, was in the first quarter of 2009 during the global financial crisis. But anecdotally the latest drop is considered the worst since World War II.

Japan had already slipped into recession in the first quarter of this year, contracting by an annualized 2.3%. It shrank 7.0% in the final quarter of last year. Recession is generally defined as two consecutive quarters of contraction. Growth was flat in July-September of last year.

Domestic demand contracted even worse in this year’s second quarter, as private investment fell. Public demand, driven by government spending, also fared worse than thought earlier.

Abe has centred his “Abenomics” policies around keeping the economy going through super-easy lending and deregulation. The approach relied mostly on monetary easing by the central bank and helped to end years of deflation. But it never attained the sustained growth rates Abe had targeted.

All of the candidates to replace him are expected to keep most of those policies in place.

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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Yuri Kageyama, The Associated Press

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How will the U.S. election impact the Canadian economy? – BNN Bloomberg

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How will the U.S. election impact the Canadian economy?  BNN Bloomberg



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Trump and Musk promise economic 'hardship' — and voters are noticing – MSNBC

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Economy stalled in August, Q3 growth looks to fall short of Bank of Canada estimates

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OTTAWA – The Canadian economy was flat in August as high interest rates continued to weigh on consumers and businesses, while a preliminary estimate suggests it grew at an annualized rate of one per cent in the third quarter.

Statistics Canada’s gross domestic product report Thursday says growth in services-producing industries in August were offset by declines in goods-producing industries.

The manufacturing sector was the largest drag on the economy, followed by utilities, wholesale and trade and transportation and warehousing.

The report noted shutdowns at Canada’s two largest railways contributed to a decline in transportation and warehousing.

A preliminary estimate for September suggests real gross domestic product grew by 0.3 per cent.

Statistics Canada’s estimate for the third quarter is weaker than the Bank of Canada’s projection of 1.5 per cent annualized growth.

The latest economic figures suggest ongoing weakness in the Canadian economy, giving the central bank room to continue cutting interest rates.

But the size of that cut is still uncertain, with lots more data to come on inflation and the economy before the Bank of Canada’s next rate decision on Dec. 11.

“We don’t think this will ring any alarm bells for the (Bank of Canada) but it puts more emphasis on their fears around a weakening economy,” TD economist Marc Ercolao wrote.

The central bank has acknowledged repeatedly the economy is weak and that growth needs to pick back up.

Last week, the Bank of Canada delivered a half-percentage point interest rate cut in response to inflation returning to its two per cent target.

Governor Tiff Macklem wouldn’t say whether the central bank will follow up with another jumbo cut in December and instead said the central bank will take interest rate decisions one a time based on incoming economic data.

The central bank is expecting economic growth to rebound next year as rate cuts filter through the economy.

This report by The Canadian Press was first published Oct. 31, 2024

The Canadian Press. All rights reserved.

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