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Japan expects worst showing since 1974
30.12.08
Japan's economy is predicted to plunge by an annualised 12.1% this quarter, its sharpest drop since 1974, according to Barclays Capital.
The gloomy assessment comes as the Tokyo Stock Exchange closed the year posting the biggest percentage loss - 42% - in its history.
"It was a year of violent change for stocks, foreign exchange and commodities markets alike," said Yukio Takahashi, market analyst at Shinko Securities. Stocks did edge up 4.1% in December, their first positive month since May. But the prognosis for the first part of 2009 is not good.
Barclays says gross domestic product in the three months ending tomorrow will fall by almost three times the 4.1% rate previously predicted.
Barclays' chief Japan economist, Kyohei Morita, blamed collapsing exports. "Given the speed and the length of the contraction, this recession could be the most severe in the post-war era," he said. "We expect negative growth will continue for a fifth straight quarter to the April-June period of 2009."
Factories have been shut and workers laid off at firms like Toyota and Panasonic as demand for goods plunges.
