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Japan’s economy unexpectedly contracted in the fourth quarter of 2023

An editorial picture of the Japan flag set against an economic trend graph and images associated with the stock market, finance and digital technology.

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Japan’s economy unexpectedly contracted again in the October-December period, provisional government data showed Thursday, as high inflation crimped domestic demand and private consumption in the world’s third-largest economy.

Provisional gross domestic product contracted 0.4% in the fourth quarter compared with a year ago, after contracting 2.9% in the July-September period. This was way below the median estimate for 1.4% growth in a Reuters poll among economists. The GDP deflator in the fourth quarter stood at 3.8% on an annualized basis.

The world’s third-largest economy also contracted 0.1% in the fourth quarter from the previous quarter, after contracting 0.4% in the third quarter from the second. This was also weaker than expectations for 0.3% expansion.

Private consumption declined 0.2% in the fourth quarter from the previous quarter, in contrast to the median estimate for a 0.1% expansion.

This is a developing story. Please check back for more updates.

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