The Associated Press - May 19, 2011
Japan's economy contracted sharply in the first quarter, veering back into recession as factory production and consumer spending wilted in the aftermath of March 11 earthquake and tsunami.
Real gross domestic product — a measure of the value of all goods and services produced domestically — shrank at an annualized rate of 3.7 per cent in the January-March period, the Cabinet Office said Thursday.
The result marks the second straight quarter that the world's No. 3 economy has lost steam and undershoots an annualized 2.3 per cent fall forecast in a Kyodo News agency survey.
While there is no universally accepted definition of a recession, many economists define it as two consecutive quarters of GDP contraction. Others consider the depth of economic decline as well as other measures like unemployment.
Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo, said there is "no doubt" that recession has returned. More surprising is just how quickly the economy crumpled, he said.
The latest GDP report includes just 20 days following the disaster, but "the impact is huge," said Schulz, who had expected to see most of the economic fallout in the second quarter.
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