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Japanese economy slips deeper into recession

Source: PTI
December 09, 2008 17:44 IST
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Recession in Japan has worsened after the country's gross domestic product shrank 0.5 per cent in the third quarter, much higher than the earlier estimate of 0.1 per cent.

According to data released by the Cabinet Office of Japan today, on a quarter-on-quarter basis, the gross domestic product (GDP) declined 0.5 per cent.

The worlds second largest economy, which has been severely hit by the global financial turmoil, contracted 1.8 per cent on an annualised basis for the July-September quarter against an initial estimate of 0.4 per cent in the third quarter.

Japan, which is primarily an export-oriented economy, is already in recession -- defined as two straight quarters of negative growth. In the second quarter, the nations GDP fell as much as 0.9 per cent.

Apart from Japan, major world economies such as the United States, Germany, Singapore and Italy have slipped into recession, in the wake of the economic crisis, which has crimped spending power of consumers and has also resulted in acute credit crunch.

In a sign that the turbulence is hitting corporate profits, auto major Toyota and electronics giant Sony have revised their earnings outlook for the coming quarters.

Moreover, Sony today announced 8,000 job cuts which aims to save more than 100 billion yen ($1.1 billion).

To tackle the ravaging turmoil, Japanese government had recently announced a stimulus package to the tune of $216 billion.

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