Japanese economy contracts in third quarter
Japan's economy contracted in the July-September period, snapping two straight quarters of expansion, squeezed by weakening demand and complicating policymakers' efforts to revive faltering growth. Gross domestic product (GDP) in the world's third-largest economy contracted 2.1 percent in the third quarter, a much larger decline that economists' median forecasts for an annualised 0.6 percent fall. It followed an annualised expansion of 4.5 percent in the previous quarter. The weak reading reflects lacklustre consumption and capital expenditure, dashing policymakers' hopes for a post-pandemic rebound in domestic activity to offset weaker external demand. Consumption fell slightly in July-September compared with economists' median estimate for 0.2 percent growth from the previous quarter after falling 0.9 percent in April-June. Capital expenditure fell 0.6 percent in the third quarter, versus a 0.3 percent gain seen by economists, after declining 1.0 percent in April-June. External demand shaved 0.1 of a percentage point off GDP in July-September, in line with expectations. Prime Minister Fumio Kishida announced this month a stimulus package worth 17 trillion yen (US$113.2 billion) aimed at boosting the economy and easing the pain of inflation. The plan involves income and residential tax reductions of 40,000 yen per person, and 70,000 yen cash handouts to low-income households. (Reuters)