The Japanese economy likely contracted last quarter, dragged down by weak consumer spending and a slump in exports, according to a top forecaster. The world’s third-biggest economy may have shrank as much as an annualized 2.5 percent, said Yoshiki Shinke, at Dai-ichi Life Research Institute. The median estimate of 25 economists surveyed July 9-22 by Bloomberg is for 0.8 percent growth after the 3.9 percent expansion in the first quarter.
“There is no doubt Japan’s economy is in a soft patch,” said Shinke, the only economist to make the Japan Center for Economic Research’s top-five list of forecasters for the past six years. “The question isn’t whether the economy contracted but how deep the contraction was.”
The warning highlights growing caution about resilience of Japan’s recovery, with industrial production dropping in three of the four months through May, and exports falling in the second quarter the most since late 2012, according to Bank of Japan data.