TOKYO Japan's economy shrank less than originally predicted in the third quarter, strengthening the belief that the world's number-three economy is slowly recovering from COVID 19 doldrums, even as its major export markets show signs of weakness.
The revised 0.8 per cent annualized contraction in gross domestic product GDP was released by the Cabinet Office on Thursday, compared with economists' median forecast for a 1.1 per cent decline in a Reuters poll and an early official estimate of a contraction of 1.2 per cent.
The result compared with a 4.5 per cent annualized gain in the previous quarter.
Japan's economy shrank unexpectedly in the third quarter due to the global recession risks, China's faltering economy, a weak yen and higher import costs.
Some analysts say that the economy may rebound in the current quarter due to easing supply restrictions on microchips and cars, lifting COVID 19 border controls and the lifting of COVID 19 border controls.
Trade-reliant Asian exporters such as Japan are being hit by a big blow to the global economy as it goes into a recession next year, despite the fact that others are bracing for the global economy to tip into a recession.
The third quarter GDP was down 0.2 per cent on the previous quarter, compared with the initial contraction estimate of 0.3 per cent. Analysts had been expecting a similar decline to the earlier reading.
Private consumption, which makes up more than half of Japan's GDP, and capital expenditure and exports, served as the main drivers of growth.
A weak yen and hefty import bills, which boost the cost of living, more than offset GDP growth contributors.
The BOJ's latest tankan report showed that the mood of the manufacturer had worsened in the three months to September, as stubbornly high material costs clouded the outlook for the fragile economy.