Fri Nov 15 07:34:41 UTC 2024: ## Japan’s Economic Growth Slows in Third Quarter Amidst Disasters and Trade Uncertainty
**Tokyo, Japan** – Japan’s economic growth slowed in the third quarter, hampered by the impact of a major earthquake warning and a powerful typhoon, according to government data released Friday. The news comes as Prime Minister Shigeru Ishiba pushes to revive the world’s fourth-largest economy.
Gross Domestic Product (GDP) expanded by a mere 0.2 percent between July and September compared to the previous quarter, meeting market expectations but marking a decline from the revised 0.5 percent growth in the second quarter. On an annualized basis, GDP grew 0.9 percent, significantly slower than the 2.2 percent growth in April-June.
The government attributed the slowdown primarily to the August megaquake alert, which triggered widespread panic buying and travel cancellations, and the impact of Typhoon Shanshan, which disrupted factory production and transportation.
Despite these challenges, the government remains optimistic about the economy’s long-term recovery. Chief Cabinet Secretary Yoshimasa Hayashi stated that the government will implement all possible economic and fiscal policies, including a new stimulus package currently under consideration, to facilitate a transition to a growth-based economy driven by wage hikes and investment.
Prime Minister Ishiba has outlined ambitious plans to revitalize Japan’s economy, including investing over 10 trillion yen ($64 billion) in artificial intelligence and semiconductor sectors by 2030. He is also seeking support from opposition parties for a supplementary budget that would include cash handouts for low-income households and families.
While increased spending on cars, wage hikes, and temporary income tax cuts contributed to positive growth during the quarter, analysts warn of substantial challenges ahead. Moody’s Analytics economist Stefan Angrick highlights the precarious global trade landscape, particularly with Donald Trump’s return as US president, as a major concern.
Angrick emphasizes the need for stronger wage growth to keep pace with inflation and the potential impact of weak external demand and domestic production issues on exports. He also suggests that a decline in the yen against the dollar could prompt the Bank of Japan to raise interest rates before year’s end, despite the recent economic data.
The slow growth figures underscore the multifaceted challenges facing Japan’s economy, requiring a strategic approach to navigate the turbulent waters ahead.
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