Wednesday, August 13, 2008

Tough Times Ahead for Japanese Economy?

I hate the word recession. It does not help anyone anywhere. We have been talking a lot about economic slowdown in the US and it seems that USA may be heading for a recession. Well, it seems that the condition in Japan is even worse. In the April-June quarter, Japanese economy shrank instead of expanding. So, Japan has entered into an economic recession. The price of oil in the international market has decreased some and it should give Japanese people some respite for the time being.

The price of oil is an important factor but there are other important things too. There is hardly any respite about the price of basic commodities like food. As a result, many people in Japan are now a bit reluctant to spend money freely on consumer goods. It is like a evil cycle.

So, what next for Japanese economy? I feel that Japan is still a very rich country and Japanese government can surely afford to spend some money to motivate the consumers to go back to on their habits.

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Annual GDP falls 2.4% in April-June qtr