Japanese Prime Minister warns of chance of double dip recession
JAPAN’S Prime Minister has warned that his country risks falling into a “double-dip” recession.
Yukio Hatoyama is the first leader of a major power to admit that the recent recovery could be a false dawn.
Japan’s export industry has been hit by the soaring yen and Hatoyama fears that the economy will again plunge into recession.
He admitted that “measures are required so that the economy will not fall into a double-dip recession”.
Japan was the first major economy to fall into technical recession after the Lehman Brothers collapse sent world economies into a tailspin – but was also the first to clamber out.
If it is heading for a double-dip recession the alarm bells will ring for other economies.
The most recent GDP figures suggested that Japan’s recovery was in full-swing, with annualised quarterly growth figures going in the right direction.
However some economists pointed to the deflation figures released along with the GDP report.
These showed that Japan would once again have to wrestle with the long-term phenomenon of falling prices, a battle that raged for much of the 1990s.