Japan’s economy, back in the red

6 years ago by in Business, Featured

Japan’s economy has most probably contracted in the October-December period, according to analysts’ expectations. It would be the fourth quarter in the last five when the gross domestic product shrinks.

The official figures are going to be announced on Monday. The analysts surveyed by Dow Jones expect a 1.6 percent contraction and believe that the strong yen, Thailand flooding and weak foreign demand have continued to put pressure on the Japanese economy in the last three months of 2011.

The recovery tendency registered in the previous quarter – when the GDP grew by 5.6 percent – was abruptly stopped towards the end of the year, mainly due to the European debt crisis which curbed demand for the export-led economy of Japan.

“Exports had driven up growth in the July-September period, but the strong yen and a slowdown in overseas economies compounded by the negative impact of the Thai floods were the main factors behind minus growth” in the last quarter, said Taro Saito, senior economist at NLI Research Institute.