Japan's Economic Struggles Deepen with Unexpected Q1 Contraction

Japan's GDP shrank by 0.5% in Q1 2024, marking three consecutive quarters of no growth and complicating the Bank of Japan's policy decisions.

Japan's GDP fell at an annualized rate of 2% in Q1 2024, worse than the forecasted 1.5% drop.
Weak consumer spending and a decline in capital investment contributed to the economic downturn.
Temporary factors like a New Year’s Day earthquake and Daihatsu's safety scandal also impacted growth.
The Bank of Japan faces challenges in raising interest rates amid ongoing economic weakness.
Japan risks falling behind India as the world's fifth-largest economy by 2025, according to IMF projections.