Japan GDP 'hit by oil highs'

13 August 2008

Japan's GDP fell over the last three months, new figures have shown.

According to the Asian nation's own official second quarter announcement, the annual rate of growth shrank by 2.4 per cent.

This contrasts with Japan's 12-month figures for January-March, which registered a four per cent increase.

GDP was also 0.6 per cent down on the previous three months, contrasting with the 0.8 per cent rise marked on the last reading.

Falls were marked for exports - the first time this has occurred in Japan since 2005 - while consumer spending has also declined due to the rising cost of food and fuel.

Record crude oil costs, with an all-time high of $147 per barrel marked during the quarter, have also taken their toll.

"The economy will keep flying at a low level this year as demand weakens, even from Europe and Asia,'' Tokyo-based Credit Suisse economist Hiromichi Shirakawa told Bloomberg.

"Japan's economy is deteriorating."

Should the nation announce a further GDP contraction for the third quarter later this year, it will be commonly recognised as having entered a recession.

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development