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May 20, 2009    

Japan’s economy in worst performance since records began

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by Kay Murchie

The Japanese economy, which is the world’s second largest, contracted 4% during the first quarter of 2009 - its worst quarterly performance since records began in 1955.

The fall in GDP was more than double the 1.6% reported for the US and worse than the 2.5% reported for Europe.

Meanwhile, on an annualised basis, Japan’s economy shrank by 15.2%, according to figures from the Cabinet Office.

According to the Cabinet Office, this is the fourth consecutive quarterly fall in GDP and follows a 3.8% contraction for the fourth quarter of 2008.

The export-dependent economy, which was once seen as relatively unscathed by the global financial crisis, is being hit by a slump in demand for its products overseas. During the first three months of 2009, Japanese exports plummeted by 26%.

Last month, the Government announced its third stimulus for the economy, introduced to boost the Japanese economy and fight off a prolonged recession.

It is hoped that once the Government’s stimulus package boosts growth and exports begin to stabilise, the economy might record its first growth in a year during the April to June period, according to analysts.

On a positive note, Japanese consumer confidence recently rose to a 10-month high and factory output rose for the first time since September.

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