South Korean media: Japan's economic growth rate in the first quarter is -0.2%, and all three countries, the US, Japan, and South Korea, are experiencing negative growth!

On May 31st, the South Korean media "JoongAng Ilbo" published an article stating that following the United States and South Korea, Japan also experienced negative growth in the first quarter. Before the impact of the "tariff bomb" from the U.S. was truly felt, major economies seemed to already be in trouble.

Recently, the Cabinet Office of Japan announced that the actual annualized GDP growth rate for the first quarter of this year was -0.2% (provisional figure), which translates to -0.7% on a yearly basis, far below market expectations (-0.2%). The Japanese economy, which had been growing in the second to fourth quarters of last year, has turned into negative growth within just one year.

Japan's exports fell by 0.6% in the first quarter, while imports increased by 2.9%. The decline in net exports dragged down the growth rate. Private consumption grew slowly, increasing by only 0.04% compared to the previous quarter. Private consumption accounts for half of Japan's GDP.

This is because consumer price inflation remained high in Japan during the first quarter, with rates at 4% in January, 3.7% in February, and 3.6% in March, leading to weakened purchasing power. In the U.S., Europe, and South Korea, post-pandemic inflation has stabilized, but in Japan, late-onset inflation is becoming a long-term phenomenon.

However, further interest rate hikes by the Bank of Japan are unlikely at this time. After ending its negative interest rate policy in March last year to counter rising prices, it conducted its first rate hike in 17 years. They stated that they would continue to raise rates after the hikes in July last year and January this year, but the slowdown in the economy makes further hikes difficult. Bloomberg assessed that "as the economic situation worsens, the Bank of Japan will temporarily halt rate hikes to monitor the expected impact of tariffs."

In the first quarter of this year, the U.S. GDP growth rate was -0.3% (annualized), South Korea was -0.2%, and Japan also experienced negative growth, deepening concerns about a global economic recession. For the first time in five years, the quarterly GDP growth rates of South Korea, the U.S., and Japan were all negative. What is worrying is that this occurred before Donald Trump officially imposed tariffs.

Previously, the U.S. announced a 25% tariff on South Korea and a 24% tariff on Japan. During the tariff grace period, both South Korea and Japan have been negotiating tariffs with the U.S., but there is a high possibility of car tariffs and reciprocal tariffs of 10% for all countries. Tatsuhiko Nomura, an economist at Nomura Securities, said, "The impact of tariffs may become more evident in the second quarter, as the first-quarter negative growth rate indicates that U.S. tariffs will push Japan into a deeper economic recession."

Original source: https://www.toutiao.com/article/1833635903788124/

Disclaimer: This article solely represents the author's viewpoint.