Monday, 17 November 2008

Japan in recession

Japan has joined the ever-growing list of countries entering recession. Bloomberg reports:

Japan's economy, the world's second largest, unexpectedly shrank in the third quarter, confirming it entered the first recession since 2001 as companies cut spending.

Gross domestic product fell an annualized 0.4 percent in the three months ended Sept. 30, the Cabinet Office said today in Tokyo. Economists predicted the economy would grow 0.1 percent after contracting a revised 3.7 percent in the previous period...

Quarter-on-quarter, Japan's economy shrank 0.1 percent, today's report showed. Capital spending fell 1.7 percent from the previous three months, compared with economists' expectations of a 2 percent drop...

Net exports subtracted 0.2 percentage point from growth after imports outweighed an increase in shipments abroad. Exports rose 0.7 percent, less than the 1.2 percent expected. Imports climbed 1.9 percent as oil surged to a record in the quarter. Economists predicted a 1.5 percent gain.

And things are expected to get worse.

"It's only going to get worse," said Masamichi Adachi, senior economist at JPMorgan Chase & Co. in Tokyo. "Japan may be entering its deepest recession in a decade as the global financial crisis cools demand overseas."

It wasn't all negative though.

Consumers are getting some relief as inflation abates and Prime Minister Aso prepares to provide households with at least 12,000 yen ($125) each as part of a 5 trillion yen stimulus plan. Consumer spending increased 0.3 percent last quarter, more than the 0.1 percent economists expected, today's report showed.

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