The Effect of Global Crisis in Japan

Theoretically believed to have been built under a strong economic and political foundation, Japan is supposedly spared from the disastrous financial storm. However, official reports from the Japanese government show that the country has caught a chilling economic cold. Rumours about a recession are even spreading. Is the country really going a bumpy ride down? Well, let us first take a look at some figures.Data from Economic and Social Research Institute show that the country’s gross domestic product or GDP dipped to -4.3 percent in January 2009, shrinking at annual rate of 12.1 percent. Analyses have shown that the downturn is mainly driven by the decline in export, the main driver of the Japanese of the economy.

Mass Demonstration on Global Crisis

Another factor blamed for the recession is the drop in domestic consumption. The consumption slump is slowing industrial production, a condition that, in turn, affects profits, investments and employment. To worsen what is already a bad case, banks are freezing loan applications, contributing to about a 30 percent increase in business failures.Now, is the country going for the worst? One would hope not. The government is now implementing measures to save the economy from a collapse. Japanese officials are talking about economic stimulus plans and economic policy changes. The government is also cooperating with the world’s developed powers to reverse the direction of this global crisis. Citizens and businesspeople alike hope that all these efforts will result to a positive outcome for all.