Japan’s Economy at the end of 2019 showed the highest decline in nearly six years because of the increase in sales tax has hit consumer spending.
Japan’s GDP in October-December decreased by 6.3% compared to the same period last year, according to preliminary data of the government.
a Bloomberg survey of economists on average had forecast a decrease of 3.8%.
the Decline was recorded for the first time in five quarters and was the highest since the second quarter of 2014, when consumption also suffered from higher sales tax.
According to the revised figures in the third quarter Japan’s GDP grew by 0.5%, not 1.8% as previously reported.
From October 1, 2019 sales tax was raised from 8% to 10%, which affected consumer spending. Private consumption, which accounts for about 60% of the Japanese economy in October-December fell by 2.9% compared to the third quarter, which was the first decline in five quarters.
business Investment fell by 3.7% compared to the previous quarter. The decline was seen for the first time in three quarters. Analysts on average had forecast a decline of 1.6%.
Domestic demand reduced GDP growth by 2.1 percentage points, while external demand has added to growth of only 0.5 points.
an Outbreak of coronavirus COVID-2019 darkens the prospects of the third largest economy in the world, raising the risk of recession.
Minister of economic recovery of Japan, Yasutoshi Nishimura in late January, said that corporate earnings and industrial production in the country can suffer from the effects of coronavirus.