Japan falls into recession, again
on May 25, 2011

Japan GDP May11.pngJapan’s ageing population has led to slow economic growth for many years. It has battled for years to try and boost domestic demand, with only limited success, as the chart of GDP growth from the Wall Street Journal shows.
Occasional bursts of growth (green column) are only followed by more red ink. Thus the economy was already slipping back into recession in Q4 last year. Now, of course, the Disaster in March means any recovery will be further deferred.
Q1 GDP fell by 3.7%. And even the Economy Minister is only hoping for 1% GDP growth over the year to March 2012. Both consumer and business spending were down, and there is little sign yet of any stimulus from reconstruction.
Instead, the downturn is likely to intensify during Q2, as inventories are run down. And until power supplies return to some kind of normality, the rebuilding process will be very slow.

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