Japan’s economy shrank in the first quarter as consumers and companies cut spending, extending a dismal performance that stretches back to last summer and complicates the picture for the central bank as it mulls the timing of its next interest rate hike.
Gross domestic product contracted at an annualized pace of 2% in the three months through March, the Cabinet Office said Thursday. Economists had forecast a contraction of 1.2%. Private consumption and capital spending both retreated, while net exports also dragged.
The report showed that the economy has failed to grow since last spring, as updated figures for the last quarter of 2023 were revised to show the economy flat-lining after slumping in the summer.