World’s no.2 economy exits recession

| August 17, 2009 | 0 Comments

The Japanese economy, which is the world’s second largest, has emerged from its longest recession since World War II after the economy grew by 0.9% in the second quarter.

The news follows on from the announcement last week that Hong Kong had emerged from recession after the economy grew 3.3% in the second quarter.

Furthermore, it followed the news that Singapore, France and Germany had also emerged from recession.

Returning to Japan, the second quarter growth comes after four consecutive quarters of contraction.

The economy officially fell into recession last year after it was hit by a slump in demand for its products overseas, particularly cars and electrical goods.

Despite today’s positive news, the Nikkei 225 lost points since the pace of growth was not as big as analysts had expected.

Furthermore, while growth is likely to continue in future quarters due to rising exports and Government stimulus packages throughout the world, economists have expressed caution for next year since exports may slow as the stimulus measures in other countries wear off.

Last week, Japan’s central bank again kept its key interest rate at 0.1% and adopted a cautious outlook for the economy.

The bank said conditions had stopped deteriorating but warned that unemployment is expected to rise and consumer spending will remain weak.

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