Japan recession deeper than estimated

Dec 08, 2014, 3:24 AM EST
An elderly man checks apples at a food supermarket in Tokyo on December 8, 2014. Japan's economy contracted more than initially thought in the July-September quarter, revised official data revealed, showing the world's third largest economy sank deeper into recession.
AFP/Getty Images

Japan's economy shrank more than initially estimated in the third quarter of 2014, according to revised gross domestic product (GDP) figures. The BBC reports:

The economy contracted by 1.9% in annual terms from July to September, well above a preliminary reading of 1.6%. It also shrank 0.5% on a quarterly basis, compared with an initial estimate of 0.4%, data showed.

A big fall in business spending plunged the economy into a deeper recession. The revised figures, which come just days before Japan's national elections, showed that business spending dipped by 0.4% from the previous quarter, instead of the 0.2% estimated in the preliminary reading.

The world's third largest economy unexpectedly fell into a technical recession after shrinking for the second consecutive quarter in July to September. It had contracted 7.3% in the second quarter, which was the biggest fall since the March 2011 earthquake and tsunami.

An increase in the country's sales tax, which was first raised in April from 5% to 8%, had hit growth in the second quarter and still appeared to be having an impact on the economy.

The dire data had led Prime Minister Shinzo Abe to call a widely-anticipated snap election last month, to seek a mandate to delay an increase in the tax to 10%, scheduled for 2015.