Japanese economy contracts at record rate
Official data released today showed that the world’s second largest economy contracted at a revised 3.8% in the first three months of 2009.
Despite the figure being revised downwards, the economy still shrank at a record pace.
Meanwhile, the revised figure translates into an annualised contraction of 14.2%.
The export-dependent economy, which was once seen as relatively unscathed by the global financial crisis, has been hit by a slump in demand for its products overseas, particularly cars and electrical goods. During the first three months of 2009, Japanese exports plummeted by 26%.
However, many are now hoping the worst may be over since the April – June quarter is expected to see modest growth – for the first time in five quarters.
Companies are benefiting from increasing demand from China where the Government is spending almost $600 billion (£365.5 billion), some of it on infrastructure.
Furthermore, the stimulus package which the Japanese Government has implemented is starting to filter through and have a positive impact.
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