Japan's Economy Shrunk After Six Quarters Due to Tariffs

Japan's Economy Shrinks for the First Time

The Japanese economy contracted 1.8 percent on an annualized basis in the July-September period, marking the first decline in six quarters. Data released by the government reveals that the tariffs imposed by U.S. President Donald Trump have severely impacted the country's exports, negatively affecting growth.

GDP and Quarterly Data

According to quarterly figures published by the Cabinet Office, Japan's gross domestic product (GDP) decreased by 0.4 percent compared to the previous period. This indicates that the economy has shrunk for the first time in six quarters. Although the contraction is less severe than the market expectation of a 0.6 percent drop, it signals ongoing risks.

Significant Decline in Exports

The largest decline this quarter was observed in exports. Exports fell by 1.2 percent compared to the previous quarter, while the annualized decline reached 4.5 percent. Experts note that some companies accelerated shipments before the tariffs went into effect, temporarily boosting previous export figures.

Import and Consumption Data

In the third quarter, imports decreased by 0.1 percent, while private consumption saw an increase of 0.1 percent. Economists indicate that weak external demand and geopolitical pressures may limit growth in the upcoming quarters.