The Japanese economy grew a meager 0.3 percent in July-September from the previous quarter, government data showed on Monday.
The figure missed forecasts for 0.4 percent and was down from last month’s preliminary reading for a 0.5 percent increase, the Cabinet Office said. It also dropped from the 0.9 percent gain in the second quarter.
The revised gross domestic product translates into 1.1 percent annual growth, shy of forecasts of 1.6 percent and down from an initial reading of 1.9 percent.
The downturn underscores the fragile state of Japan’s economic recovery, which has enjoyed a temporary boost as consumers splurge ahead of an increase in the sales tax in April 2014.
Prime Minister Shinzo Abe has urged companies to bolster wages in an attempt to reignite the moribund economy. He has applauded Hitachi Ltd and Toyoto Motor Corp for agreeing to help in the effort.
“The slowdown in growth could be temporary,” Kohei Okazaki, an economist with Nomura Securities Co has said. “Japan’s economy will probably regain momentum toward the end of March as last-minute demand before the sales-tax increase will provide a tailwind for consumption.”
The Cabinet gave the green light to an 18.6 trillion yen ($180 billion) economic stimulus package to cushion the blow from next April’s sales-tax increase that will drive down spending.
The measures, including 5.5 trillion yen in spending, is aimed at boosting Japan’s real GDP by about 1 percent and create some 2,500 jobs, according to Bloomberg.
By Maesie Bertumen
Image: Héctor Romero/Flickr