Japan’s economic growth slows to 0.3pc in second quarter

Japan’s economic growth slowed in the second quarter as the eurozone crisis hurt exports and domestic consumption remained subdued.Gross domestic product grew by 0.3 per cent during the period from the previous three months. That is down from 1 per cent growth in the first quarter.Compared with the same period last year, the economy expanded by 1.4 per cent.Analysts warned that Japan’s growth may slow further in coming months amid an uncertain global economic climate.“As domestic demand is losing momentum and exports will likely weaken further due to Europe’s debt trouble, there is a possibility that Japan will go back into an economic lull in July-September (period),” said Yuichi Kodama, chief economist at Meiji Yasuda Life Insurance in Tokyo.Multiple factorsJapan’s economy has been hurt by a variety of reasons in recent times.A fragile economic recovery in the US and the ongoing debt crisis in the eurozone, two of the biggest markets for Japanese goods, have hurt the country’s export sector.A strong Japanese currency has made things more difficult for the country’s exporters by making their goods more expensive and denting their profits.According to the latest data, a dip in external demand shaved off 0.1 percentage point from Japan’s gross domestic product (GDP) during the second quarter.At the same time, policymakers have found it tough to boost domestic consumption enough to offset the decline in foreign sales.Household spending and private consumption both rose just 0.1 per cent during the period, from the previous three months. That was down from 1.2 per cent expansion they had seen in the previous quarter.“We knew external demand would be weak, and it looks like consumption and public works investment aren’t strong enough to support growth,” said Hiroshi Miyazaki, chief economist at Shinkin Asset Management Company in Tokyo.