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Japan’s Economy Shrinks 6.8%
Japan reports that its economy, which expanded by an annualized 6.1% in January-March, contracted 6.8% in April-June.
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Japan reports that its economy, which expanded by an annualized 6.1% in January-March, contracted 6.8% in April-June. It was the country's largest quarterly decline since earthquakes and a tsunami struck three years ago.
In absolute terms, Japan's gross domestic product reversed a 1.5% expansion in January-March by shrinking 1.7% in the second quarter.
Economists blame the slump on the country's consumption tax, which climbed to 8% in April from 5%. Consumer spending, which accounts for 60% of Japan's economy activity, dropped 5% from the first to second quarter.
But Economics Minister Akira Amari remains optimistic about the country's outlook. He notes the Japanese job market continues to improve, points to an uptick in sales of consumer electronics and suggests the country "continues to recover moderately."
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