Japan's economy sees biggest fall since 2011August 13, 2014 - 10:37 AMT PanARMENIAN.Net - Japan's economy contracted by an annualized 6.8% in the second quarter of the year, the biggest fall since 2011 when it was devastated by an earthquake and tsunami, according to BBC News. The official gross domestic product (GDP) figure though was smaller than the 7.1% drop economists expected. The shrinkage was largely in response to a government sales tax, which held back consumer spending. Japan's sales tax rose from 5% to 8% in April. On a quarterly basis, the economy contracted 1.7% in the second quarter after a 1.5% rise in the first three months. Private consumption, which makes up 60% of economic activity, was 5% down on the previous quarter. The economy grew at an annualized rate of 6.1% in the first quarter of this year. Recent retail sales and factory output figures both indicated a negative impact from the sales tax rise. Marcel Thieliant, Japan economist at Capital Economics, said a rebound was expected in the coming months: "The collapse in economic activity last quarter was largely a result of the higher sales tax, and we still believe that the recovery will resume in the second half of the year. Consumers had brought forward spending ahead of April's increase in the consumption tax." The Japanese government appears confident that its economy, the world's third largest, will pick up the pace later in the year. In a statement issued after the GDP release, Economics Minister Akira Amari said: "Looking at monthly data during April-June, sales of electronics goods and those at department stores are picking up after falling sharply in April. The job market is also improving steadily. Taking these into account, Japan's economy continues to recover moderately as a trend and the effect of the sales tax hike is subsiding." Related links: Top stories Yerevan has dismissed Turkey’s demand to shut down the Armenian nuclear power plant as “inappropriate”. Armenia will loan 2.9 billion drams to Nagorno Karabakh (Artsakh), according to a draft government decision. The Ministry of Ecology and Natural Resources of Azerbaijan has “strongly condemned” Armenia’s decision. Kerobyan has said that for the first time in the history of Armenia, the volume of foreign direct investments amounted to about $1 billion. Partner news | European Parliament to discuss repression in Azerbaijan The European Parliament will discuss repression of civil society in Azerbaijan on April 24 PACE wants concessions from Azerbaijan to accept Baku back A PACE co-rapporteur said that Azerbaijani authorities must make certain concessions so that the country can return to PACE. Cyprus parliament honors Armenian genocide victims Acting House President Zacharias Koulias noted that April 24 marks the “black anniversary” of the Armenian genocide. Armenia PM, France envoy discuss regional matters Issues related to the consistent development of Armenia-France cooperation were discussed. |