GDP in the 3rd quarter shrank 1.8%, in annualized terms; consumption slows to 0.1%
Japan’s economy shrank in the quarter ending in September. Real GDP (Gross Domestic Product) shrank 0.4% compared to the previous quarter, according to preliminary government data released this Monday (17.Nov.2025). This result compares to the 0.6% growth recorded in the period from April to June and marks the 1st contraction in 6 quarters.
In annualized terms, the economy shrank by 1.8%. Here is the data (PDF – 385 kB).
Japan is one of the countries affected by US tariffs. The tariffs affected the Asian country’s exports, according to the agency . AAutomakers’ sales to other nations, for example, plummeted after a period of growth before the tax rates imposed by the North American president came into force, Donald Trump (Republican Party).
The US and Japan formalized a deal in September that covers almost all Japanese imports, compared with an initial tariff of 27.5% on automobiles and 25% on most other goods.
Private consumption, which represents more than half of economic production, grew 0.1%, in line with market estimates. This result was lower than the 0.4% in the 2nd quarter, indicating that high food costs increased reluctance to spend.
Investments in capital goods, another key factor in growth driven by private demand, increased by 1% in the 3rd quarter, far exceeding the market estimate of 0.3%.
The GDP data comes as the Japanese government draws up a stimulus package to help families cope with the rising cost of living.
“Private consumption increased for the 6th consecutive quarter and capital investments grew for the 4th consecutive quarter”said , minister responsible for Japan’s economic security, in a statement cited by Reuters. “This reinforces our view that the economy remains on a moderate recovery path.”he stated.
