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Japan’s Economy Sinking Into The Abyss As Global Crisis Worsens

December 29th, 2008
Japan’s economy, the world’s second largest after that of the United States, is sinking into the abyss. After a lost decade of stagnation, the global economic crisis threatens to transform the Japanese economic recession into a full-blown depression. This is reflected in recently released economic data on Japan’s industrial output.

According to the most recent data, Japan’s industrial production dropped by more than 8 % in November from the previous month. This is the steepest one-month decline in Japanese industrial output on record, and is directly related to the demand destruction resulting from the global economic crisis. Japan’s economy is largely based on export-driven manufacturing, so the latest economic data indicates that worldwide demand for Japanese manufactured products is dropping like a lead stone.

Japanese automakers are among the major producers that have seen a sharp decline in orders for their products from overseas customers, especially in the United Sates. Many analysts and economists are issuing dire forecasts that the Japanese economy, highly dependent on export-driven trade, will contract sharply as the Global Economic Crisis grows more severe

“Production is falling off a cliff,” said Naoki Iizuka, a senior economist in a statement to the Reuters news agency. “The Japanese economy is unlikely to bottom out until October-December next year as output is expected to remain very weak until then,” he added, reflecting the gloomy cloud now hanging over the world’s second largest economy.


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