The latest result came after the third largest economy in the world hit by a series of natural disasters, while an intense global trade dispute starts to reduce overseas demand.
Negative contribution to GDP came from private demand (0.2 percentage points), of which private consumption (-0.1 percentage points) and change in private inventories (-0.1 percentage points), while business spending gave no contribution to growth. At the same time, public demand substracted 0.1 percentage points off growth, and net exports had a negative contribution of 0.1 percentage points.
Private demand declined by 0.2 percent in the September quarter, reversing from a 1.1 percent rise in the second quarter, driven by a marked drop in private consumption (-0.1 percent vs 0.7 percent in Q2) and compared to market expectations of a 0.2 percent decrease. In addition, capital expenditure fell unexpectedly by 0.2 percent, following a 3.1 percent growth in the second quarter and missing estimates of a 0.6 percent gain. It was the first decline in capital expenditure since the third quarter 2016.
Also, public demand dropped 0.2 percent, after a 0.1 percent gain in the preceding quarter. The decline was mainly due to a faster fall in public investment (-1.9 percent vs -0.3 percent in Q2), which was the the steepest contraction in a year; while government spending was stable (at 0.2 percent).
Exports of goods and services plummeted 1.8 percent, reversing from a 0.3 percent rise in the second quarter and marking the steepest fall since the second quarter 2015. Also, imports dropped 1.4 percent, compared to a 1 percent growth in the June quarter and reaching the biggest drop since March quarter 2016.
On an annualized basis, the economy shrank 1.2 percent, worse than market forecasts of a 1 percent contraction and following a 3 percent expansion in the June quarter. Private consumption fell, amid a decline in investment spending and a tumble in public investment.