Japanese economy dives in the first quarter on dismal domestic demand

In the first quarter, the Japanese economy shrank a bit due to the fact that corporate as well as consumer spending decreased.

Exports dived too against the backdrop of trade clashes as well as weaker global demand, thus affecting the Japanese trade-reliant economy.

The country’s GDP is anticipated to have slumped by 0.2% in January-March on an annualized basis, as the poll of 18 financial analysts revealed, after it surged by 1.9% in the fourth quarter 2018.

It would evolve into a flat outcome on a quarter-on-quarter basis, right after the Japanese economy managed to ascend by 0.5% in the October-December quarter, as the poll revealed.

Companies probably delayed their capital spending on fears about the global economic deceleration as well as uncertainty over trade negotiations between China and America, as some analysts pointed out.

Financial analysts expect consumer spending to have dived due to the fact their sentiment was impacted by a number of factors, in particular food prices.

As for capital spending, it probably slumped by 1.7% in the first quarter following 2.7% surge last quarter.

Private consumption, accounting for nearly 60% of GDP, decreased by 0.1% for the quarter, having ascended by 0.4% in October-December.

External demand was anticipated to surge by up to 0.3% in the first quarter, as the survey revealed, after it had 0.3% subtracted from GDP surge in the previous quarter.

Experts tell that a dive in imports because of dismal domestic demand turned out to be greater than a dive in exports that led Japan's net exports to improve for January-March.