Japan yesterday revised down its quarterly growth figures, reigniting fears that the world’s third-largest economy was stumbling amid turmoil in Europe and a slowdown in Asia.
Analysts said GDP figures were within market expectations, but warned that an export slump and widening trade deficit would hurt the faltering economy, which grew 0.2 percent between April and June.
Preliminary figures from the Cabinet office had earlier shown 0.3 percent GDP growth for the quarter.
“Japan’s economic slowdown is visible now,” said Hideki Matsumura, chief economist at Japan Research Institute.
“Exporters are facing a tough environment, while the auto sector is slowing at home due to the end of government incentives” for eco-friendly cars, he said.
“I’m afraid that we are going to see more and more negative economic data from now on. It would be no surprise if Japan’s GDP shrinks later this year,” he said.
On an annualized basis, the economy grew a revised 0.7 percent in the quarter, lower than a preliminary 1.4 percent rise, the data showed.
The government has taken a series of steps to spur growth, including the incentives for fuel-efficient vehicle purchases and measures to rebuild the northern region hit by last year’s deadly earthquake and tsunami.
However, Japan’s economy has faced headwinds caused by Europe’s debt crisis, which has slowed growth worldwide, while a high yen has made Japanese exports less competitive in overseas markets.
The latest GDP data showed ajustments in other figures.
Capital spending showed a 1.4 percent on-quarter increase, down from a preliminary 1.5 percent expansion.
Private consumption, which accounts for about 60 percent of Japan’s GDP, was unchanged from an initial estimate of a 0.1 percent gain.
In another sign of slowing growth, Japan’s current account surplus in July tumbled 40.6 percent from a year earlier as exports to Europe and China weakened, the finance ministry said.
The current account, the broadest measure of Japan’s trade with the rest of the world, recorded a surplus of ￥625.4 billion (US$8 billion), down from a year ago but ahead of a market forecast of ￥438.2 billion.
Within the current account figures, Japan posted a trade deficit of ￥373.6 billion, reversing a year-earlier surplus as exports turned down 7.4 percent.