Sunday, March 08, 2009

Japan: Record Deficit amidst Economic Recession

Everything in Japan is down today. There is less export, less import, falling share market, falling consumer confidence. The only thing perhaps is increasing is deficit. The real estate sector is suffering and there is no good news for the insurance sector too. Japan is a power house of car, consumer electronic products and machineries. The global economic slowdown means that there is less demand for these products. That is why, the country experienced  current account deficit for the first time in 13 years.


Reuters wrote:

The first deficit in 13 years came as the global financial crisis dried up demand for Japanese exports and, combined with a strong yen at the time, shrank the profits from overseas investments, including subsidiaries of its major manufacturers.

"The supply-demand dynamics have changed, and the current account balance indicates further yen weakness," said Kimihiko Tomita, head of foreign exchange at State Street Bank & Trust Co.


There is no hope for early recovery as it is a global problem not just limited to Japan