Japan GDP contracted -0.3% qoq in Q3, much worse than expectation of 0.3% qoq. In annualized term, GDP contracted -1.2%, versus expectation of 1.1%. GDP deflator dropped -0.5% yoy, versus expectation of -0.2% yoy.
During the quarter, imports rose strongly by 5.2% yoy on higher energy costs and weak Yen exchange rate. Exports grew only 1.9% qoq and led to a decline in net exports, which dragged GDP down. Domestically, private consumption grew 0.3% qoq only.
“Increased imports due to the easing of supply constraints and a temporary increase in payments for external services contributed to the negative growth,” Chief Cabinet Secretary Hirokazu Matsuno said.
“The environment surrounding households and businesses is becoming more difficult, with declining real household incomes and rising corporate costs,” Matsuno added.
