Japan back in recession, Singapore in danger too

Japan went back into recession in 2004 according to the latest figures from the Cabinet Office, which showed that the economy shrank 0.1 percent in the fourth quarter while the figures for the second and third quarters were revised to show falls of 0.2 and 0.3 percent respectively.

Economists, however, remain sanguine and expect the Japanese economy to pick up in the coming months as private consumption improves.

For the whole of 2004, GDP expanded 2.6 percent, the highest growth rate since 1996.

Singapore performed much better, with its Ministry for Trade and Industry reporting that the economy grew 7.9 percent in the fourth quarter on an annualised quarter-on-quarter basis and by 8.4 percent for 2004 as a whole. Manufacturing was the strong driver of growth in the fourth quarter, rising 14.1 percent over the previous year, with biomedical manufacturing outstanding.

The outlook for 2005, however, is not as good. The composite leading indicator fell for the second consecutive quarter in the fourth quarter, down 1.9 percent over the previous quarter, larger than the 1.2 percent fall in the previous quarter.

The ministry forecasts economic growth for 2005 at 3-5 percent.