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TwitterJapan's economy contracted more than economists estimated in the first quarter, underscoring the damage the March 11 earthquake and tsunami inflicted on capital spending and factory production.
Gross domestic product shrank at an annualized 3.5 per cent rate in the three months ended March 31, the Cabinet Office said today in Tokyo, compared with the 3 per cent median forecast of 23 economists surveyed by Bloomberg News. The government initially estimated a contraction of 3.7 per cent last month.
Toyota and Nissan, which posted sales declines in May, are working to restore operations after the disaster caused a shortage of parts and power, pushing the economy into a recession. Analysts including Yoshimasa Maruyama say the report doesn't alter predictions that the economy will gain momentum later this year as companies boost output and government reconstruction projects get underway.
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“The supply chain disruptions have been easing at a faster pace than we expected, and it looks like companies will be investing in repairs relatively quickly,” said Maruyama, an economist at Itochu Corp. in Tokyo. “The second quarter contraction will be milder -- probably about half the pace of the first quarter. Once reconstruction spending kicks in in the third quarter, we'll see a V-shaped rebound.”
Read more: http://www.smh.com.au/business/world-business/japans-economy-shrinks-more-than-forecast-20110609-1fu8l.html#ixzz1OmG9E2cC
Gross domestic product shrank at an annualized 3.5 per cent rate in the three months ended March 31, the Cabinet Office said today in Tokyo, compared with the 3 per cent median forecast of 23 economists surveyed by Bloomberg News. The government initially estimated a contraction of 3.7 per cent last month.
Toyota and Nissan, which posted sales declines in May, are working to restore operations after the disaster caused a shortage of parts and power, pushing the economy into a recession. Analysts including Yoshimasa Maruyama say the report doesn't alter predictions that the economy will gain momentum later this year as companies boost output and government reconstruction projects get underway.
Advertisement: Story continues below
“The supply chain disruptions have been easing at a faster pace than we expected, and it looks like companies will be investing in repairs relatively quickly,” said Maruyama, an economist at Itochu Corp. in Tokyo. “The second quarter contraction will be milder -- probably about half the pace of the first quarter. Once reconstruction spending kicks in in the third quarter, we'll see a V-shaped rebound.”
Read more: http://www.smh.com.au/business/world-business/japans-economy-shrinks-more-than-forecast-20110609-1fu8l.html#ixzz1OmG9E2cC
