Japan’s Gross Domestic Product declined by 0,6% in the first quarter in comparison with the last year, Bloomberg reports. This parameter did not meet forecasts of economists. Lower private consumption overlapped higher data on capital investments.

GDP weakening is partly related to lower global demand. However, economists are more optimistic abbout second quarter growth, relying on the US and EU regarding export volumes and support of economy.

Weak private consumption is a problem for the Bank of Japan that is trying to reach target 2% inflation. It actually decreased by 0,1% in first quarter. However, it was result of revising fourth quarter data to 0,3% growth.

Rise in export, capital investments and tight labor market in many years will sooner or later result in wage and consumer spending increase that will stimulate inflation.

While economists are expecting that economic growth will continue in the second quarter, it will still be lower that 1,7% in 2017. Dependence of Japan on external demand make it vulnerable to any trade disruptions like ones that can be now observed in the world.