Japanese economy shrinks

TOKYO, Aug. 13 (UPI) -- Japan economy shrank in the last quarter, the first such decline in four quarters, pointing to an economic downturn.

The gross domestic product in the April-June quarter contracted 0.6 percent from the previous quarter, or at an annual rate of 2.4 percent in real terms, the Cabinet Office said Wednesday.

The shrinkage was blamed on weak exports as well as weak domestic consumption, Kyodo news service reported. Consumer spending accounts for about 55 percent of Japan's GDP.

The report said the GDP fall provides more evidence Japan's economy has entered a downturn, given a similar slowdown in the United States and rising inflation around the world, The United States is Japan's largest market.

Japanese Economic and Fiscal Policy Minister Kaoru Yosano, while noting "downside risks," suggested the negative growth due to "external factors" may be temporary as Japan's economic fundamentals remain firm.

The Kyodo report said the latest figures compared with market forecast of a 0.6 quarterly decline and a 2.3 percent annual rate of decline.