Third quarter economic results for Japan show a lower than expected growth rate as businesses slash spending.
According to Japan’s Cabinet Office, gross domestic product rose at an annual 1.3 percent pace, much less than the expected 4.8 percent. Economists expected about a 2.8 percent growth.
The cabinet report revealed that companies were holding back on investment into new equipment.
Following the downgraded figures, new Prime Minister Yukio Hatoyama unveiled a 7.2 trillion yen ($89.5 billion) stimulus package yesterday. The Bank of Japan last week announced a 10 trillion yen credit program to support the economy.
The good news is that consumer spending, which accounts for more than half of Japan’s economy, rose 0.9 percent and export increased 6.5 percent compared with the second quarter.
