Japan’s economy returned to contraction in the first quarter of 2022, shrinking by 0.2% compared to the previous three months, preliminary official data showed. Experts on average had forecast a stronger GDP decline of 0.4%.

According to the revised data, GDP rose 0.9% in the fourth quarter, not 1.1% as previously reported.

The contraction in Japanese GDP in the first quarter was mainly due to a 0.1% decline in consumer spending. Meanwhile, government spending rose 0.6% after falling 0.3% a quarter earlier.

Exports rose 1.1% last quarter, while imports rose 3.4%.

Business capital investment rose for the second straight quarter, up 0.5%.

In terms of annualized rates, Japanese GDP shrank by 1% in January-March. Experts’ consensus forecast called for a 1.8% decline, Trading Economics data showed.

A spike in the incidence of COVID-19 last quarter forced the Japanese government to introduce new quarantine measures, including restrictions for restaurants and retailers, which negatively affected the overall level of business activity in the country.