Latest news with #economiccontraction
South China Morning Post
21 hours ago
- Business
- South China Morning Post
Japan's economy contracts less than expected, but US tariffs loom large over BOJ policy
Japan 's economy contracted in the first quarter of the year by less than initially estimated on better inventory and consumption figures, while still backing caution by the Bank of Japan (BOJ) as it weighs its policy path amid heightened uncertainty. Advertisement Gross domestic product shrank at an annualised pace of 0.2 per cent in the three months through March, the Cabinet Office said on Monday, compared with a 0.7 per cent retreat in preliminary data. Economists had expected that initial figure to stand. Personal consumption rose 0.1 per cent, while business spending gained 1.1 per cent. Inventories contributed 0.6 percentage points to growth, while net exports posted a drag of 0.8 percentage points. The revised figures confirmed that the world's fourth-largest economy contracted even before US President Donald Trump added to the headwinds facing the economy by expanding his tariff measures in April. For the BOJ, the data are still likely to support a wait-and-see approach for now, particularly after it slashed its growth forecast for this year at the last policy meeting. People cross a street in Tokyo's Shinjuku business and shopping district. Japan's economy recorded its first economic contraction in four quarters. Photo: EPA-EFE BOJ officials were very cautious about the impact of tariffs, which Governor Kazuo Ueda described as having 'extremely high' uncertainties. He warned last week that tariffs could affect Japan's economy through multiple channels, pledging to evaluate economic and price developments through a broad array of indicators.
Reuters
6 days ago
- Business
- Reuters
German services sector contracts at fastest rate in 2-1/2 years, PMI shows
BERLIN, June 4 (Reuters) - Germany's services sector recorded its sharpest contraction in activity in 2-1/2 years in May as weaker demand and heightened uncertainty took their toll, a survey showed on Wednesday. The final HCOB Purchasing Managers' Index (PMI) for the services sector fell to 47.1 in May, down from 49.0 in April, marking its lowest level since November 2022. PMI readings below 50.0 indicate a contraction in activity, while those above point to growth. The survey found accelerated declines in both activity and new business, while the pace of job creation slowed. "The service sector is no longer stabilizing the overall economy, it is slowing it down," said Hamburg Commercial Bank chief economist Cyrus de la Rubia. Services firms in Europe's biggest economy, which is battling to avoid a historic third year of contraction in 2025, registered a reduction in inflows of new work in May for the ninth month in a row. Despite a recovery in business expectations from April's recent low, confidence remained subdued by historical standards. Nevertheless, de la Rubia said conditions for a recovery were "relatively good". The HCOB's broader composite PMI index, which includes both manufacturing and services, slipped into contraction in May, falling to 48.5 from 50.1 in April, reflecting slower growth in manufacturing production and the accelerated decline in services activity.
Argaam
29-05-2025
- Business
- Argaam
US economy contracts 0.2% in Q1 amid rising imports
The US economy contracted less than expected in the second reading of first-quarter Gross Domestic Product (GDP), with imports rising and government spending falling. Data released today, May 29, showed real GDP shrank 0.2% annualized in the first quarter, below the initial 0.3% contraction estimate. This second reading beat analyst forecasts of a 0.3% decline, following 2.4% growth in the previous quarter. The Bureau of Economic Analysis attributed the contraction to higher imports and lower government spending, partly offset by increases in private investment and exports. The revision mainly reflects higher investment estimates, partly balanced by lower consumer spending figures. The Bureau of Economic Analysis kept the personal consumption expenditures (PCE) price index at the initial estimate of the last quarter of 3.6%. It lowered the core PCE price index, excluding food and energy, to 3.4% from 3.5% of the previous estimate.
Yahoo
16-05-2025
- Business
- Yahoo
Japan's economy shrinks more than expected
Japan's economy contracted at a higher page than expected in the first quarter of 2025, according to official data for the January to March period released on Friday. Japan's Gross Domestic Product (GDP) contracted by 0.2% compared to the previous quarter, the first quarterly drop since the January-March period in 2024. However, compared with the same quarter in the previous year, Japan's economy shrunk 0.7% — much steeper than the forecast 0.2% contraction The decline was largely due to a fall in exports, which drive the Japanese economy. Data shows demand for exports was waning even before US President Donald Trump announced sweeping tariffs. On April 2, the US imposed a 24% tariff on Japanese goods. It also imposed an additional 25% levy on cars. The US is the largest market for Japan's auto industry. After a reprieve, the tariffs are due to take effect in July, unless Japan can negotiate a deal. "Uncertainty is greatly heightened by the Trump tariffs, and it is likely that the economic slowdown trend will become clearer from (the second quarter) onward," BNP Paribas chief economist Ryutaro Kono told AFP news agency. Tokyo has been trying to negotiate a trade deal with the US, but policymakers have acknowledged its has been difficult to plan a response as Trump keeps changing his mind. Japan's economy has been vulnerable for quite some time now, as an aging population balloons welfare spending but limits labor and demand. The Japanese central bank had long maintained a policy of negative interest rates to boost the economy but began to gradually hike rates last year. Japan's economy "lacks a driver of growth given weakness in exports and consumption. It's very vulnerable to shocks such as one from Trump tariffs," said Yoshiki Shinke, senior executive economist at Dai-ichi Life Research Institute, told Reuters news agency. "The data may lead to growing calls for bigger fiscal spending," he said, adding that "the possibility of the economy entering a recession cannot be ruled out, depending on the degree of downward pressure caused by the tariff issue." Edited by: Wesley Rahn
Washington Post
16-05-2025
- Business
- Washington Post
Japan's economy shrinks as Trump's trade war hits exports and shakes confidence
TOKYO — The Japanese economy contracted at an annual rate of 0.7% in the first quarter, according to government data released Friday, as U.S. President Donald Trump's trade war hurt exports and dented consumer confidence. Japan's real gross domestic product, or the measure of a nation's goods and services, shrank at a greater-than-expected 0.2% in January-March compared to the previous quarter in the first contraction in a year, the Cabinet Office's seasonally adjusted preliminary data showed.
