New figures show steep decline in Japanese economy
Japan's economy has contracted at the fastest pace since 1955 as exports plunged, companies slashed production and families spent less, it was announced today.
Japan's real gross domestic product, or the total value of the nation's goods and services, shrank at an annual pace of 15.2% in the January-March period, the Japanese government said today.
The drop was the steepest since Japan began compiling GDP statistics more than five decades ago.
It also marks the fourth straight quarter of decline after the GDP fell a revised 14.4 % in the October-December period.
Economists had expected a 15.8% contraction on average.
"Weakness in the corporate sector is gradually spreading to households," Prime Minister Taro Aso told politicians in a parliamentary budget hearing. "This is a very serious situation, so we need to respond appropriately."
On a quarterly basis, GDP fell 4.0% from the previous three-month period, according to the Cabinet Office's preliminary data.
Japan's first quarter results were markedly worse than other major economies, outpacing the euro zone's 2.5% quarterly decline and a 1.6% contraction in the US.
The world's second biggest economy had relied heavily on the rest of the world to buy its cars and gadgets to drive economic growth.
Like its Asian neighbours, it has been pummelled by the unprecedented collapse in global demand triggered last year by the US financial crisis.
Japan's exports plummeted a record 26% in the first quarter from the fourth quarter, the government said.
In response, major exporters such as Toyota Motor Corp and Sony Corp have moved quickly to adjust by reducing shifts, suspending factory lines and announcing thousands of job cuts over the past few months.
Japan's jobless rate jumped to 4.8% in March, the highest in more than four years.
