Japanese Economy Shrinks at Annualized 12.7% Pace, Worst Since 1974

Japan's Gross Domestic Product fell for the third consecutive quarter in the final three months of 2008, by -3.3% as demand for the Asian country's flagship goods such as cars and electronics took a dive on slowing global consumption. On an annualized basis, the data signaled that the island economy had contracted at an annualized -12.7% pace. Economists had forecast the metric to fall by only -3.1% on the quarter.

Slowing global demand for the country's goods continued hampering Japan's ability to weather the storm. Sales of vehicles manufactured in Japan throughout January fell by largest amount in at least 29 years. Indeed, the January reading of the said car data fell -27.9% in the 12 months through Jan. 31st. As such, it was of little surprise that the export portion of the metric fell by -13.9% in the period alone.

With spending on Japanese goods plummeting by so much it was no surprise that new spending on entrepreneurial projects took a steep dive as well. Non-residential investments fell for the fourth consecutive quarter – by -5.3% in the last.

DailyFX

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