Japan's GDP contracted 2.9% year on year in the third quarter. Such data today, December 8, presented government of Japan. The decline turned out to be more significant than previously expected—preliminary data on a 2.1% decline in GDP were published in November. The result was also worse than analysts' expectations, who had predicted a decline of 2%.
Businesses cut expenses especially sharply in the third quarter—thus, the allocation of funds for capital investments fell by 4%. However, consumer spending also decreased by 0.2%. “Personal consumption spending is likely to remain weak in the near future as real disposable income is likely to continue to decline, which is seen as a drag on consumption,” said Kota Suzuki, an economist at Daiwa Securities. It was previously reported that wages in Japan have increased by an average of 1.5% since the beginning of the year - however, this growth was offset by inflation at 3%.