Japanese GDP shrinks 12.7% as exports plunge
Japan's economy shrank at an annual 12.7% pace last quarter, the most since the 1974 oil shock, as recessions in the US and Europe triggered a record drop in exports.
By Bloomberg |
TOKYO: Japan's economy shrank at an annual 12.7% pace last quarter, the most since the 1974 oil shock, as recessions in the US and Europe triggered a record drop in exports. Gross domestic product fell for a third straight quarter in the three months ended December 31, the Cabinet Office said in Tokyo. The median estimate of 26 economists surveyed by Bloomberg News was for an 11.6% contraction.
Exports plunged an unprecedented 13.9% from the third quarter as demand for Corolla cars and Bravia televisions collapsed amid a slump that the Group of Seven nations said will persist for most of 2009. Toyota Motor Corp, Sony Corp and Hitachi Ltd ��� all of which forecast losses ��� are firing thousands of workers, heightening the risk a decline in household spending will prolong the recession.
���The economy is in terrible shape and the scary part is that we���re likely to see a similar drop this quarter,��� said Seiji Adachi, a senior economist at Deutsche Securities Inc in Tokyo. ���All we can do is wait for overseas demand to pick up.���
The Nikkei 225 Stock Average fell 0.4% at the close in Tokyo, extending the year���s losses to 13 percent. The yen rose to 91.59 per dollar from 91.76 on speculation Japan will refrain from taking measures to weaken the currency. The yen���s 18% gain over the past year has compounded exporters��� woes by eroding the value of their overseas sales.
The world���s second-largest economy shrank 3.3% from the third quarter, the report showed. That compared with the US���s 1% contraction and the euro-zone���s 1.5% decline, which was the sharpest in at least 13 years.
There���s no doubt that the economy is in its worst state in the postwar period,��� Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo. ���The economy, which is heavily dependent on exports of autos, electronics and capital goods, has been severely hit by the global slowdown.���
Exports plunged an unprecedented 13.9% from the third quarter as demand for Corolla cars and Bravia televisions collapsed amid a slump that the Group of Seven nations said will persist for most of 2009. Toyota Motor Corp, Sony Corp and Hitachi Ltd ��� all of which forecast losses ��� are firing thousands of workers, heightening the risk a decline in household spending will prolong the recession.
���The economy is in terrible shape and the scary part is that we���re likely to see a similar drop this quarter,��� said Seiji Adachi, a senior economist at Deutsche Securities Inc in Tokyo. ���All we can do is wait for overseas demand to pick up.���
The Nikkei 225 Stock Average fell 0.4% at the close in Tokyo, extending the year���s losses to 13 percent. The yen rose to 91.59 per dollar from 91.76 on speculation Japan will refrain from taking measures to weaken the currency. The yen���s 18% gain over the past year has compounded exporters��� woes by eroding the value of their overseas sales.
The world���s second-largest economy shrank 3.3% from the third quarter, the report showed. That compared with the US���s 1% contraction and the euro-zone���s 1.5% decline, which was the sharpest in at least 13 years.
There���s no doubt that the economy is in its worst state in the postwar period,��� Economic and Fiscal Policy Minister Kaoru Yosano said in Tokyo. ���The economy, which is heavily dependent on exports of autos, electronics and capital goods, has been severely hit by the global slowdown.���
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