TOKYO- Japan’s economy likely contracted in the third quarter as curbs to contain COVID-19 infections and supply constraints hit consumption and output, a Reuters poll showed, underscoring the slow pace of recovery from the pandemic’s damage.
While analysts expect growth to rebound in the current quarter, the weak data would reinforce expectations Japan will lag other countries in withdrawing crisis-mode stimulus steps.
The world’s third-largest economy likely shrank an annualized 0.8 percent in July-September after expanding 1.9 percent in the previous quarter, due largely to an expected 0.5 percent slump in consumption, according to analysts polled by Reuters.
External demand neither contributed nor shaved off gross domestic product (GDP) and capital expenditure shrank 0.6 percent from the previous quarter, the poll showed, a sign corporate activity may be losing momentum after having served as a driver of growth.
“Consumption, capital expenditure and exports likely all fell in a sign Japan’s economy continued to slump,” said Saisuke Sakai, senior economist at Mizuho Research and Technologies.
