Natural disasters have deeply affected Japan’s economy which contracted by an annualized 1.2% in the third quarter.
Trade war is gradually hitting Japan economy.
Initial reports indicate that Japan’s economy mostly shrank an annualized 1.2% between July and September.
An earthquake and typhoon hit Japan and caused the higher than the estimated decline in economic growth by disrupting exports.
The slowdown also follows a trade war between the US and China which affected global trade and economic development. Economists had predicted 1% shrinkage for the three months to September.
In the recent quarter, exports reduce 1.8% from the previous quarter making it the fastest deterioration in more than three years.
Several natural disasters hit Japan over its summer. It also includes the worst flooding disasters in decades, an earthquake and a deadly typhoon. These disasters brought havoc and disrupted factories as well as affect domestic spending.
Rising trade tensions among world powers could cause a strain on Japan’s future growth. Japan has an important part in the global supply chain for which reason the US-China trade war hit the country particularly hard.
If the trade war intensifies, then exports of car parts, electronics, and industrial machinery are at peril of disruption.
An economist said: “Trade war uncertainties have begun to increase, we see some slowdown in Asia and that is gradually hitting Japan”.
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