Japan's GDP contracts 1.8 pct in Q3

Japan's economy contracted an annualized real 1.8 percent in the third quarter of 2025, marking the first contraction in six quarters, according to preliminary government data released on Monday.

Quarter-on-quarter, real gross domestic product (GDP), adjusted for inflation, in the July-September period declined 0.4 percent from the previous three months, according to the Cabinet Office.

The shrinkage in GDP was widely expected, as the Japanese economy grappled with sticky inflation, sluggish private spending and higher U.S. tariffs.

Exports decreased 1.2 percent from the April-June period while imports were down 0.1 percent. As a result, external demand, or exports minus imports, subtracted 0.2 percentage points from the GDP, accounting for half the decline.

Among other key components, private consumption, which accounts for more than half of economic output, inched up 0.1 percent while corporate investment increased 1.0 percent.

Japan's auto industry, which accounts for nearly 10 percent of GDP and 8.3 percent of jobs, has taken a heavy hit from the U.S. tariffs. In the first half of fiscal 2025, the seven major Japanese car-makers lost about 1.5 trillion yen (about 10 billion U.S. dollars). This is the first time since COVID-19 pandemic that all seven reported profit declines, with several falling into the red.

At the same time, Japan’s growth outlook is weakening. The government has cut its 2025 GDP forecast from 1.2 percent to 0.7 percent, and the OECD has made the same downgrade.

Japan's GDP contracts 1.8 pct in Q3

Japan's GDP contracts 1.8 pct in Q3

Japan's GDP contracts 1.8 pct in Q3

Japan's GDP contracts 1.8 pct in Q3

A group of demonstrators gathered in Bulgaria's capital Sofia on Monday to protest against U.S. and Israeli strikes on Iran.

The protesters rallied with signs reading "Do not engage war in Iran" and "We do not welcome U.S. military aircraft", to show solidarity with Iran.

"No one has the right to launch an attack on a sovereign country or interfere in its decisions," said Kostadin Kostadinov, chairman of the Bulgarian Revival party, while delivering a speech at the rally.

"The U.S. military equipment should not be brought to Bulgarian territory and the territory cannot be used in any form for military operation against Iran. We demand the U.S. military planes to immediately leave Bulgarian territory. This is not our war. The Iranian people are not our enemy. Iran is not our enemy," Petar Nikolaev Petrov, deputy chairman of the Bulgarian Revival party, said in his speech.

Several U.S. military planes have been deployed at Sofia Airport in recent days, though the Bulgarian government denied that they were linked to U.S. military operations.

The U.S. and Israel on Saturday launched strikes against Iran, plunging the war-torn Middle East into a new round of violence. Iran has retaliated with a series of counterattacks against Israel and U.S. targets across the region.

Protesters rally in Bulgaria against US-Israeli strikes on Iran