Japan slipping deeper into recession

9 Dec , 2014

Japan has plunged into a deeper recession due to a big fall in business spending.

Already in a technical recession following difficult first and second quarters, Japan’s economy shrank more that initially estimated in the third quarter of 2014, according to revised gross domestic product (GDP) figures released yesterday.

An increase in the country's sales tax, which was first raised in April from 5% to 8%, had hit growth in the second quarter and still appears to be having an impact on the economy.

The dire data had led Prime Minister Shinzo Abe to call a widely-anticipated snap election last month, to seek a mandate to delay an increase in the tax to 10%, scheduled for 2015.

The tax increase was an integral part of the previous governments austerity programme designed to curb Japan's huge public debt, which is the highest among developed nations.

Unfortunately, with confidence amongst Japanese manufacturers at an all time low, the situation is expected to deteriorate further.

Japan, Market watch, Recession, Stock Market