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Japan's economy shrinks as tax hike hits spending
http://hosted.ap.org/dynamic/stories/A/AS_JAPAN_ECONOMY?SITE=VANOV&SECTION=BUSINESS&TEMPLATE=DEFAULTJapan's economy shrinks as tax hike hits spending
By YURI KAGEYAMA
AP Business Writer
Aug 13, 1:00 AM EDT
TOKYO (AP) -- The Japanese economy shrank at an annual pace of 6.8 percent in the second quarter after spending got slammed by a sales tax hike that kicked in from April, government figures showed Wednesday.
Japan's gross domestic product, or the total output of goods and services, also contracted 1.7 percent during the April-June period from the previous quarter.
The decline in GDP was the worst since the March 2011 tsunami and quake disaster in northeastern Japan. In the first quarter of 2011, Japan's economy shrank at an annual rate of 6.9 percent.
The weak figures were expected as consumers and businesses had front-loaded spending in the first quarter to beat the April 1 increase in sales tax. Economists expect spending to pick up again in coming months.