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GDP UPDATE2(Japan Economic Newswire Via Acquire Media NewsEdge) TOKYO, Feb. 13 -- (Kyodo) _ (EDS: ADDING INFO. UPDATE3 TO FOLLOW) Japan's economy contracted a faster-than-expected 2.3 percent in annualized terms during the last three months of 2011 on slowing exports, affected by the mass flooding in Thailand and gloomier prospects for the world economy due to the sovereign debt crisis in Europe, the government said Monday. The October-December real gross domestic product marked the first decline in two quarters. But the Cabinet Office said this was due to temporary effects of the Thai floods, which had adversely impacted major Japanese manufacturers, stressing that the world's third-biggest economy remains on a recovery track following the March 2011 earthquake and tsunami. Analysts had forecast an average 1.4 percent drop in a Kyodo News survey. The real, or inflation-adjusted, GDP corresponded to a 0.6 percent contraction on a non-annualized basis from the previous quarter, in which the economy grew an upwardly revised 1.7 percent. Exports of goods and services slowed a real 3.1 percent with the office saying that shipments to Europe and Asia were remarkably lower. By product, vehicles and electronic parts, including semiconductors, led the decline. The Thai floods, which government officials say have little continued impact on the Japanese economy, previously caused serious drops in production and exports by major Japanese carmakers and high-tech firms operating facilities in the Southeast Asian country. In addition, slower growth prospects for Europe have weighed on business and consumer sentiment in the region and imports from Asia have considerably decelerated. Japan normally exports key components to other Asian economies such as Taiwan, South Korea and Singapore, and those economies make final products for consumption in Europe. Imports, meanwhile, accelerated 1.0 percent. Weak external demand, or net exports, eroded the latest GDP by 0.6 percentage point while domestic demand pushed growth only by 0.1 percentage point, the office said in a preliminary report. Consumer spending, which makes up about 60 percent of Japanese GDP, increased 0.3 percent. Corporate capital spending rose 1.9 percent while public investment fell 2.5 percent. In nominal terms, or unadjusted for price change, GDP fell an annualized 3.1 percent in the reporting period, which corresponded to a 0.8 percent contraction from the previous quarter. For the whole of 2011, GDP logged a real 0.9 percent decline from 2010, the first fall in two years. GDP is the total value of goods and services produced domestically. (c) 2012 Kyodo News International, Inc. |