Japan GDP contracts for third straight quarter

Japan's economy contracted at an annualized rate of 0.4 percent in the October-December period for a third consecutive quarter of decline due to sluggish exports amid the global economic downturn, the government said Thursday, indicating that the country is still in a recession. The result followed a revised 3.8 percent decline in the previous quarter. On a quarterly basis, the gross domestic product (GDP) of the world's third-biggest economy fell 0.1 percent in the three months ended Dec.31 from the July-September period, according to preliminary report released by the Cabinet Office. "The fall in the last quarter of 2012 was due to continued drops in exports caused by the global economic slowdown and weak business investment," Economy and Fiscal Policy Minister Akira Amari said in a statement after the release of GDP data. "The Japanese economy will remain weak for the time being. But it is expected to post a moderate recovery backed by the government's economic stimulus measures and the Bank of Japan's monetary easing," said Amari. Exports, one of the key engines of nation's economic recovery, slid 3.7 percent from the previous quarter, on the global slowdown and plunge in exports to China amid tensions over a territorial dispute. Imports dropped 2.3 percent. The report also showed that capital spending in the October-December period went down 2.6 percent for a fourth straight quarterly decline, while personal consumption, which accounts for about 60 percent of Japan's GDP, expanded 0.4 percent on quarter. The GDP deflator, a key inflation gauge, fell 0.6 percent. For the whole of 2012, GDP rose 1.9 percent on year. GDP is the total value of goods and services produced domestically.