Japan’s economy shrank at an annualised rate of 1.0% in Q1 of 2022 from the previous quarter. Private consumption, which makes up more than half of the economy, fell slightly due to Covid-19 curbs that hit the service sector and the Ukraine war. The surging commodity prices also created new headaches for consumers and businesses. Many analysts expect Japan’s economy to rebound in the coming quarters, but the war in Ukraine and a slowdown in the Chinese economy dim the recovery prospects. Japan’s export-reliant economy got little help from external demand, with net exports knocking 0.4% point off gross domestic product (GDP) growth.
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