The Japanese production and consumer spending have fallen sharply what indicates that the country is heading for a serious and prolonged recession.
The industrial production fell by 3.1% and the consumer spending by 3.8% in October compared with previous month. Both a lot faster than analysts predicted. That resulted in companies adjusting their production very quickly to reflect the lowered demand. Car makers are the ones that are hit the worst. But other sectors also start suffering, steelmakers for example.
Analysts are now forecasting a drop in industrial production of 8.6% for the fourth quarter. Early figures already showed that the Japanese exports fell by 7.7% and the Yen climbed stronger than ever against the Dollar. This is very bad because the Japanese production is very reliant on export to other industrial countries who all have been hit by the global crisis.
The recession is something the Japanese government will have to fight against by taking measurements that will help both the companies and the consumers. And it’s their duty to preserve the current level of prosperity by minimizing the negative effects. But on a general view I think the Japanese economy will have to endure this difficult period and they can only hope it will get better soon.
Source: http://news.bbc.co.uk/2/hi/business/7754159.stm
2 comments:
I agree with your opinion because I also think it's the main task of a government to protect and to help its economy and its consumers.
At a certain point, I think the help of the government must stop, because otherwise the companies are to independant of the government
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