Japan’s economy shrinks 7pc in last quarter

TOKYO, Mar 9: Japan's economy contracted at a dismal 7.1per cent annual rate during the October-December period, worse than the initial estimate, raising fears the world's third largest economy could be headed to a recession.
The contraction was the first for Japan in more than a year and followed an Oct. 1 increase in the sales tax, which hit retail spending. The Cabinet Office data, released Monday, were a revision from last month's estimate of a 6.3per cent decline.
The data do not reflect the steep downturn in tourism and other business activity related to the virus outbreak that has spread from China to much of the world. Most economists are forecasting another contraction in the current quarter.
On a quarterly basis, the economy shrank 1.8per cent in October-December from the previous quarter. The earlier estimate was of a 1.6per cent contraction.
Domestic demand, including investments and consumption fell 2.4per cent. Government spending was flat.A technical recession is defined as two consecutive quarters of contraction.
Yoshimasa Maruyama, analyst with SMBC Nikko Securities, called the situation "serious."
"The recession could be more than just technical and the economy could really decline," he said.    -AP