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Japan caught in Asia slowdown
12 Sep 2008Japan's economy shrank 3% during the last quarter, the steepest slide since 2001, as companies and households cut spending and exports fell.
GDP for the three months to June shrank by more than the annualised 2.4% initially forecast, the Cabinet Office said in Tokyo today.
Economists expect this to continue into next year as the US slowdown spreads to Asia, where Japan ships half its exports.
“Japan's economy will keep slowing at least until the end of this year,” said Hiromichi Shirakawa, chief Japan economist at Credit Suisse Group in Tokyo.
But Shirakawa was confident that the pain would be short-lived.
“Compared with previous recessions, this one will be very shallow,” he said.
“We're at the deepest point of the downturn now.”
Central bank Governor Masaaki Shirakawa said last week that the country's growth was likely to “remain sluggish for the time being”.
