Major economic powerhouses such as United States, Canada and Europe are heading towards recession. Japan too, is not spared.
A recent report by Merrill Lynch indicated that the country is likely to embrace recession in the next 12 months. The cabinet in the Prime Ministers office is expected to officially declare an economic recession in due time.
The falling numbers of exports, drop in public and private investment, and lower consumer spending combine to shake the economic pillar of the country, with its GDP (growth domestic product) shrinking by some 0.6 percent. The rate of the downturn is the fastest and ugliest since the last recession in 2001.
Japanese based automaker, Toyota, which is currently the world’s biggest car maker has seen its profits slumping close to 30% as the continued increase of petrol price put off consumer’s interest to buy vehicles. Its sales in America is the worst hit and its performance of going 7 years with full profits is in grave danger.
“The increase in oil and commodity prices is damaging corporate profits, while rising inflation is hurting households,” Mamoru Yamazaki, chief economist for Japan at RBS Securities told The Times, UK based newspaper.
Japan was struggling during the recession periods declared separately in 1998 and 2001.