WORLD> Asia-Pacific
|
WORLD> Asia-Pacific
|
|
Japan economy seen shrinking at 10% in 4Q
(Agencies)
Updated: 2009-02-14 00:27 TOKYO -- Japan's economy likely contracted at an annual pace of more than 10 percent in the fourth quarter, analysts predict, reflecting the collapse in global demand that is battering the world's second-biggest economy.
The Cabinet Office is expected to reveal Monday that gross domestic product in the October-December period plunged an annualized 11.7 percent, according to a consensus of market forecasts. That would mark the steepest drop for Japan since the oil shock of 1974 and far outpaces declines of 3.8 percent in the US and an estimated 1.2 percent in the euro-zone.
"Since October economic indicators have deteriorated at a pace that defies any rule of thumb," Tetsufumi Yamakawa, chief Japan economist at Goldman Sachs, said in a recent report. "There has been an unprecedented large decline in exports and production-related indicators in particular, not only in Japan but throughout Asia." Goldman Sachs predicts GDP, the total value of the goods and services produced in a country, will tumble an annualized 8.8 percent in the fourth quarter, and fall 3.8 percent for all of 2009. That would be worse than the 2 percent contraction in 1998 during Japan's last financial crisis. JP Morgan predicts GDP will decline at a 9 percent pace in the fourth quarter and expects the figure to worsen to 12 percent this quarter. "Adding to the dismal forecast, we remain cautious about unexpected events in financial markets, including a sudden further appreciation of the yen and another plunge in equity prices, toward the end of the fiscal year in March," said Masamichi Adachi, senior economist at JP Morgan in Tokyo, in a note to clients Friday. Japan's exports plummeted a record 23 percent in the fourth quarter, as the deepening global slowdown choked off demand for the country's cars and gadgets. Even demand from emerging markets, which earlier had partly offset declines in North America and Europe, dropped sharply. The figures underscore the vulnerability of Asia's export-driven economies during global downturns and point toward more cuts in jobs, production and profits in the coming months. Japanese electronics company Pioneer Corp. said Thursday it will cut 10,000 jobs globally, joining a growing list of the country's corporate giants scrambling to slash their payrolls. Sony Corp. is shedding 8,000 workers, while Nissan Motor Co. and NEC Corp. are each cutting 20,000. In the July-September period, GDP shrank at an annual pace of 1.8 percent. The data confirmed that Japan slipped into recession in the third quarter after GDP contracted an annualized 3.7 percent in the April-June period. A recession is commonly defined as two consecutive quarters of negative growth, though many economists using other parameters say that the current downturn actually began in late 2007. |
||||||
