Japan's creaking economy inched closer to recession in the three months to March, with gross domestic product (GDP) falling 0.2 per cent over the period, the Japanese government said today.
"To my regret, this is the actual strength of the Japanese economy at the moment," said Minister of Economic and Fiscal Policy Mr Heizo Takenaka.
On an annualised basis, the world's second-biggest economy contracted 0.8 per cent during the quarter.
In the financial year to March, Japan's GDP grew by 0.9 per cent, falling well short of the government's goal of 1.2 per cent economic growth.
Mr Takenaka conceded the government's GDP expansion target of 1.7 per cent in the current financial year would now be "difficult" to attain.
The US economic slowdown weighed on Japanese exports of goods and services for the quarter, which dropped 3.6 per cent from last quarter's rise of 0.8 per cent and, said Mr Takenaka.
Imports fell 2.2 per cent against a rise of 5.1 per cent the previous quarter.
HSBC senior economist Mr Peter Morgan said today's data showed Japan is on the brink of a return to recession.
"Most of private demand components were zero or negative, on that basis you can say that it is going in the direction of recession," he said.
Japan was last in recession - technically defined as two consecutive quarters of negative GDP growth - at the end of 1999.
AFP