Japan’s economy shrinks, falls back into recession

PanARMENIAN.Net - Japan's economy has fallen into recession again after it shrank 0.8% on an annualised basis in the third quarter, BBC News reports.

The preliminary data means the world's third-largest economy has contracted for a second consecutive quarter, marking a technical recession.

Growth was expected to decline after it fell a revised 0.7% in the second quarter on weak domestic demand.

Japan has been in recession four times since the global financial crisis. On a quarterly basis, growth fell 0.2% in the third quarter from the previous one, weaker than forecasts of a 0.1% decline.

The seasonally adjusted figure was also much lower than expectations of a 0.2% drop.

Economists said the weak data will put more pressure on the government and central bank to continue to stimulate the economy.

However, Marcel Thieliant, economist at research firm Capital Economics, said policymakers have showed "considerable reluctance" to respond to weaker growth with more stimulus as inflation accelerates, and he does not expect more easing at the central's meeting this week.

"The upshot is that the Bank's preferred inflation measure, which excludes prices of fresh food and energy, should start to moderate soon," he said in a note.

"We therefore remain convinced that more stimulus will eventually be needed, and now believe that the January meeting is the most likely venue for its announcement."