Japan’s economy shrank at an annualized rate of 2.3% in the fourth quarter of 2011, as exports continued to decelerate amid ongoing worries about the euro area debt crisis and anemic growth elsewhere in the world.
The contraction compared with the median forecast for a 1.3% decline by economists.
GDP growth stood at a revised 7% in the previous quarter, the Cabinet Office said today in Tokyo.
Economy Minister Motohisa Furukawa cited the Thai floods and a weak overseas recovery for the fourth-quarter contraction, adding that the economy will continue recovering slowly and is on an upward swing.
“We expect a steady increase in exports on a gradual recovery in the global economy,” Furukawa said.
Net exports, or overseas shipments less imports, subtracted 2.6% from annualized GDP, today’s report showed. Capital investment rose at a 7.9% pace, the first increase in five quarters, and consumer spending rose 1.2%, the third straight advance.
The GDP deflator, a gauge of price trends, fell 1.6% in the fourth quarter from a year earlier. In nominal terms, GDP contracted at an annualized rate of 3.1% from the previous quarter.
The IMF estimates that Japan’s economy will grow by 1.7% in 2012, compared with a likely 1.8% expansion for the US and an estimated 0.5% contraction for the euro area.