Japan’s economy almost stalls as exports suffer
Growth in the third quarter slowed more than expected as the US-China trade war and tensions with Korea knocked exports
Japan's economy came almost to a standstill in the three months to September as a weaker Chinese economy and tensions with South Korea took a toll on exports.
The world's third-largest economy after the US and China grew at an annualised rate of 0.2 per cent during the third quarter, following a 1.8 per cent rise in the previous quarter, the government said.
The data fell well short of economists’ forecasts of a 0.8 per cent gain.
The sharp deceleration comes as Prime Minister Shinzo Abe is mulling a stimulus package to support the country’s economy amid a global slowdown and the impact of a recent sales tax hike.
Private consumption, which accounts for more than half of gross domestic product, rose slightly as consumers bought more white goods and stocked up on daily necessities before the national sales tax was upped to 10 per cent on October 1 from the previous 8 per cent.
But external demand suffered as exports were hit by the protracted China-U.S. trade war that has upset supply chains, hitting the Chinese economy.
US President Donald Trump has suggested a trade deal with China may be concluded soon, but so far has offered no fresh details on the talks.
The Japanese slowdown also reflects the continuing diplomatic row with South Korea over compensation for wartime forced labourers.
The worsening ties have hit Japan’s exports to the neighbouring country, which tumbled 16 per cent in September, and the number of Korean tourists declined during the third quarter.