Japan’s economy expanded by just 0.3 percent in the quarter from April to June compared with the first three months of the year.
That was just half the pace that economists had expected.
Growth from the same period last year was 1.4 percent.
The figures provide fresh evidence of a global slowdown hitting the United States, Europe and even China and economists fear is it not over yet for Japan, given the problems in China.
Joy Yang, Chief Economist with Mirae Asset Management, said: “Japan is an advanced country and its exports are not only to China, but a large portion of them are to Europe and the United States. So we think Japan’s slowdown is not just explained by the slowdown of China, but rather the whole slowdown of the whole global economy.”
With exports down, private domestic consumption had boosted growth in the first three months of the year, but for the second quarter that was weaker than expected.
Worries over the economic outlook meant Japanese consumer confidence worsened in July from June, and plans to raise sales taxes will not help.
Japan’s parliament last week approved plans to double the country’s five percent consumption tax by 2015. Critics argue the higher tax will dampen domestic consumption.