Japanese economy contracts at record rate

| June 11, 2009 | 0 Comments

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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