Japan’s industrial output decreases amid global economic slowdown

Japan’s industrial output showed negative growth for the second month in a row due to the fall of global demand and ongoing supply issues. All of these factors have a negative impact on the Japanese producers’ activity.

At the moment, the third-largest economy in the world is behind other developed countries in recovering from the pandemic. The decrease in industrial output, along with the weakening of business activity in the country in general, demonstrate the difficulties which it’s currently facing. In order to counteract a record level of inflation, the government of Japan supports the economy through the monetary stimulus policy.

In October, the country’s industrial output decreased by 2.6% compared to the month before. According to government data released on Wednesday, seasonal adjustments were taken into account. The output didn’t meet economists’ expectations, who on average assume a decline of around 1.5%. The decrease in the output in September in accordance with revised data was 1.7%.

Takeshi Minami, chief economist at Norinchukin Research Institute, stated that the decrease in Japan’s industrial output and export, combined with limited consumption amid inflationary pressure, might lead to a slowdown in the country's economy as early as the first half of next year.