Japan’s economy slipped into a technical recession, after the economy unexpectedly contracted again in the October-December 2023period, government data showed Thursday 15th February 2024.
High inflation affected domestic demand and private consumption in what’s now the world’s fourth-largest economy.
Provisional gross domestic product contracted 0.4% in the fourth quarter compared with a year ago, after a revised 3.3% slump in the July-September period. This was below the estimate of a 1.4% growth.
The Japanese economy also contracted 0.1% in the fourth quarter from the previous quarter, after shrinking a revised 0.8% in the Q3. This was also weaker than the expected 0.3% expansion.
Nikkei one year chart to 15th February 2024
Japan has lost its spot as the world’s third-largest economy to Germany, as the country unexpectedly slipped into recession.
Technical recession
A technical recession is a term used to describe two consecutive quarters of decline in output. It is measured by the Gross Domestic Product (GDP), which is the overall output of goods and services in a country.
A technical recession is usually caused by slowing growth or an isolated event rather than a major underlying cause.