News On Japan

Japan's GDP Shrinks by 2.0% in Q1 Due to Daihatsu Scandal

TOKYO, May 16 (News On Japan) - Japan's real GDP growth rate for the first quarter of this year, from January to March, was announced by the Cabinet Office to be an annualized minus 2.0%.

The halting of automobile production and shipments significantly impacted GDP, resulting in negative growth for the first time in two quarters.

The real GDP growth rate from January to March was minus 0.5% compared to the previous three months, translating to an annualized decrease of 2.0%.

The production and shipment stoppages caused by Daihatsu Motor's certification fraud significantly dragged down personal consumption and capital investment.

Personal consumption, which accounts for more than half of GDP, has been negative for four consecutive quarters, the first time in 15 years.

However, within personal consumption, dining out remained strong, and food also contributed positively.

Shinichiro Kobayashi, Chief Researcher at Mitsubishi UFJ Research and Consulting, commented: "If nominal wages start to rise this fiscal year, the currently sluggish personal consumption may gradually improve, leading to a moderate economic recovery."

On the other hand, there are concerns that the historically weak yen could further increase prices, impacting consumer sentiment.

Source: ANN

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