Japan’s economy outperformed most of its G7 peers in the first half of this year on robust private consumption and spending for reconstruction following last year’s earthquake.
However, growth has stalled since then. Indeed, growth in the June quarter was revised down in the latest figures by half to just 0.1 percent. The last quarterly economic contraction was in the October-December period of last year, when GDP declined 0.3 percent.
With the economic effect of rebuilding from last year’s earthquake and tsunami fading, the government acknowledged last week that its index of leading indicators gauge fell to a level suggesting the onset of a recession.
“I cannot deny the possibility that Japan has fallen into a recession phase,” Maehara told reporters after the data was released.