Japan confirms sharp drop in GDP
TOKYO, March 12 – Japan’s economy shrank 3.2 per cent in the final three months of last year, revised government data showed on Thursday, confirming the sharpest contraction since the oil crisis in 1974.
The fall in gross domestic product (GDP) for the October-December quarter in real, price-adjusted terms was slightly smaller than economists’ forecasts for a 3.3 per cent contraction, which was the same as the initial estimate.
The revised figure translates into an annualised contraction of 12.1 per cent, against the previous reading of a 12.7 per cent contraction, the same size fall forecast by economists.
While the global financial crisis has dragged much of the rich world into recession, the contraction in Japan, the world’s No.2 economy, is about twice as deep as elsewhere due to its dependence on exports.
The euro zone economy shrank 1.5 per cent in the same period while the United States contracted an annualised 6.2 per cent.
Japan’s economic slump is its deepest in the modern era and economists see it also becoming the longest, with dwindling export demand prompting firms to slash payrolls and freeze wages.
A Reuters poll of 25 economists showed the economy is expected to shrink 2.5 per cent in three months to March and 0.4 per cent in the following quarter, which would mark an unprecedented five straight quarters of contraction.
