Japan's Q1 Economic Growth Rate Falls by 0.2%... Negative Growth for the First Time in Four Quarters

The Japanese economy recorded negative growth for the first time in four quarters.

According to the Cabinet Office of Japan on May 16, the country's real gross domestic product (GDP, preliminary figure) for the first quarter of this year decreased by 0.2% compared to the previous quarter. On an annualized basis, this represents a decline of 0.7%.

Tokyo street scene. Photo by AFP

The Nihon Keizai Shimbun (Nikkei) reported that this figure was below the median forecast of a 0.2% annualized decline, which was compiled in advance by the financial information provider QUICK.

This marks the first time in four quarters that Japan's quarterly economic growth rate has turned negative, following a -0.4% contraction in the first quarter of last year. Since then, quarterly growth rates had increased, with 0.9% in the second quarter, 0.2% in the third quarter, and 0.6% in the fourth quarter of last year.

Nikkei pointed out that the negative growth in the first quarter of this year was influenced by personal consumption, which accounts for more than half of GDP and increased by only 0.04% compared to the previous quarter. In addition, exports decreased by 0.6%, turning negative for the first time in four quarters, while imports rose by 2.9%, which had a negative impact on GDP growth.