Japan Q2 GDP shrinks 7.1%, fastest pace since 2009
TOKYO—Japan’s economy contracted in the second quarter at the fastest pace since 2009, dealing a blow to Prime Minister Shinzo Abe’s efforts to re-energize the economy with pro-growth steps.
Revised data released Monday showed that the country’s gross domestic product contracted an annualized 7.1% in the April-to-June quarter from the previous three-month period, as businesses as well as consumers retrenched after the government raised the sales tax. Preliminary figures showed a 6.8% decline.
While purchases of big-ticket items such as homes, cars and TVs soared in the run-up to the first sales tax rise in 17 years, they plummeted once the higher levy took effect on April 1.
The revised data showed that second-quarter consumption dropped 5.1% with business spending falling by the same percentage.
Even with the negative impact of the higher sales tax making a sharp fall in the GDP almost a foregone conclusion, analysts still expressed concern.
