Japan recession may hurt global economy
The reading
Japan has slipped back into recession, leaving financial analysts to ponder over the implications for the global economy. Japan's economy unexpectedly shrank for the second consecutive quarter. Two successive negative quarters officially puts a country in recession. The slide in the last quarter has taken economists by surprise. Figures indicated that Japan's economy would grow by 2.1 per cent in the last quarter. Instead, gross domestic product (GDP) fell by 1.6 per cent between July and September. Many economists attribute the fall to April's increase in sales tax from five to eight per cent. Many Japanese consumers have tightened their purse strings and are simply not spending.
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World leaders are worried that Japan's slide back into recession could be ominous for the global economy. British leader David Cameron said the world was on the brink of a second economic disaster. He told reporters he saw "red warning lights" for the global economy because of international "instability and uncertainty" and a slowing of growth in emerging markets, especially Brazil and China. Mr Cameron said the problems were "plain to see". He added: "The Eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices. Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down."
Sources:
- http://www.independent.co.uk/news/uk/politics/david-cameron-warns-of-new-global-economic-crisis-9864307.html
- http://www.bbc.co.uk/news/business-30077122
- http://the-japan-news.com/news/article/0001724963
