Monday, Feb 16, 2009
Japan’s economy shrank in the last quarter by its most since the first oil crisis in 1974, hit by an unprecedented slump in exports, which is likely to lead to more calls for extra stimulus.
Japan has not suffered much directly from the bursting of bubbles in U.S. credit and housing markets, but its heavy dependence on exports and persistently soft domestic consumption has led to a sharper contraction than other major economies.
As the rich world faces its worst downturn in decades, the Group of Seven (G7) policymakers pledged at the weekend to do all they could to combat recession.
Japan’s economy shrank 3.3 percent, or an annualised 12.7 percent in the fourth quarter of 2008 — three times the fall in gross domestic product in the same quarter in the United States, at the epicentre of the current global crisis.