Concerns Over Continued Economic Contraction Amid Soaring Raw Material Prices
Due to COVID-19 Impact and Overlapping Ukraine War
[Asia Economy Reporter Hyunwoo Lee] Japan's economic growth rate decreased by 0.2% compared to the previous quarter, returning to negative territory after two quarters. This is interpreted as a deterioration in the macroeconomy due to the ongoing impact of COVID-19 and the surge in raw material prices caused by the Ukraine crisis.
On the 18th, Japan's Cabinet Office announced that the real Gross Domestic Product (GDP) for the first quarter of this year (January to March) recorded -0.2% compared to the previous quarter. The annualized GDP growth rate, calculated assuming the current trend continues for a year, was -1.0%. The nominal growth rate for the first quarter was 0.1% compared to the previous quarter (annualized 0.4%).
Japan's real GDP growth rate recorded -0.7% quarter-on-quarter in the third quarter of last year, then rebounded to 0.9% in the fourth quarter, escaping recession, but it has returned to negative territory after two quarters.
Since the beginning of this year, economic activity has been shrinking due to the rapid spread of COVID-19 infections, and since February, the Russian invasion of Ukraine has caused international oil prices and raw material prices to soar, negatively impacting the macroeconomy.
However, the decline in this growth rate was smaller than previously announced private forecasts. In a survey conducted by the Japan Center for Economic Research (JCER) of 36 private economic experts, the real GDP for the first quarter was expected to decrease by 1.36% (annualized) compared to the previous quarter.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
