Japan's Recession is Deepening


Economic data published over the last few weeks has been unequivocally showing that the Japanese economy may be in a much worst condition than many economists previously thought. In fact, the downturn which began in November 2007 may become one of the longest recessions the Japanese economy however seen.

At Trading Economics, we expect real GDP in the fourth quarter of 2008 to shrink by more than 6% annualized and the slump to continue further throughout 2009. Exports which have been the main driver of the Japanese economy over the past few decades are deteriorating day by day due to a weakening global demand and a strong yen. For example, only in November, shipments to the U.S. and Europe slipped more than 30 percent, leaving exports 26.7 percent lower from a year earlier. Along with a dramatic drop in external trade, industrial production is shrinking hitting corporate profit and business investments and banks are more reluctant to lend causing the bankruptcy of many small businesses.


Anna Fedec, contact@tradingeconomics.com
1/18/2009 5:24:34 PM