N’S economy expanded just 0.3 per cent in April-June, half the pace expected, raising doubts about the strength of its recovery.
The data, released yesterday, provides fresh evidence of a global slowdown as growth in the US, Europe and China flounders, raising expectations in financial markets that monetary policymakers will take more action to lift the world economy.
Economists had expected Japan’s growth to pull back to 0.6 per cent after a strong expansion of 1.3 per cent in the first quarter when government subsidies on low-emission cars drove up private consumption.
But private consumption was weaker than expected in quarter two and exports, traditionally the driver of Japan's economic growth, shaved 0.1 percentage point off of the quarter’s GDP.
Japan’s economy minister, Motohisa Furukawa, yesterday blamed the Eurozone debt crisis and global weakness of demand for the decline.
Furukawa did not rule out extra fiscal stimulus to kick start the country’s economy.