Japan's economy slowed to a standstill in the first quarter of 2003 as exports stalled ahead of the war in Iraq, leaving a year-long recovery on thin ice and underscoring concerns that the global economy is stagnating.
Gross domestic product was unchanged from the previous quarter, the Cabinet Office said this morning, just avoiding a contraction after four straight quarters of solid but slowing growth.
The figure was in line with analysts' forecasts and down from the previous quarter's 0.5% growth, suggesting that the world's second largest economy was struggling even before the impact on trade of the SARS virus and a stronger yen.
Exports took 0.2% off GDP in the quarter, a big swing from the plus 0.3% of the previous quarter, raising worries that the economy's main prop had been kicked away.
Growth in spending by firms also slowed to 1.9% from 3%, although it proved more resilient than economists had expected, while personal consumption - the biggest chunk of the economy - improved slightly to 0.3%.
