Japan’s GDP dropped 2.3% on an annualized basis according to data from the Japan Cabinet Office. Exports of goods and services were down 11.9%. Based on most media reports, the number was below estimates.
The steep drop was because of the strong yen and supply interrupts to manufacturers because of floods in Thailand.
The number will cause more questions about the strength of the global recovery. Japan’s GDP is third among nations just behind China. The IMF recently lowered GDP forecasts for the nation, in part because of trouble in most European economies. The agency dropped GDP forecasts .6% to 1.7% for 2012 and down .4% to .1.6%.
Japan recently reported its first trade deficit since the early 1960s.
The data is one more piece of evidence that the drags on global growth are rising.
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