708-Chaudhari Technical Institute, Gandhinagar - Gujarat ...

Overview of Japan economy
Japan's Economy:
Before Japan's 2011 earthquake and nuclear power plant disaster, its
economy was emerging from the deepest recession since the 1970s. It
rebounded strongly in 2010, when GDP increased by a strong 3% -- the
fastest growth in 20 years. It fell off briefly during the last quarter of 2010, but
was expected to pick up again with stronger exports to fast-growing neighbors
in Asia.
However, Japan lost much of its electricity generation when it shut down
nearly all its nuclear power plants after the earthquake. The economy shrank
.5% in 2011 as manufacturing slowed due to the crisis.
If that weren't bad enough, Japan's economy is still challenged by rising
commodity prices -- the country imports most of its food and oil -- and a
shrinking labor pool, as its population ages. Japan is also challenged by
a debt-to-GDP ratio of more than 200%. Like the U.S, much of Japan's debt
resulted from efforts to stimulate its economy out of a 20-year deflationary
period and recession.
Japan's recession became official in Q4 2008 when GDP growth plummeted
12.9% from a year earlier, the worst decline since the 1974 recession. Japan's
economic collapse was a shock, since Q3 growth was only down .1%,
following a decline of 2.4% inQ2 2008. The severe downturn was a result of
slumping exports in consumer electronics and auto sales, 16% of Japan's
economy and a driving force behinds the country's economic revival from
2002-2008.
Japan's economy had only recently recovered from the deflation that hobbled
it in the 1990s. Japan's economy was up 2.1% in 2007, and 3.2% in Q1 2008,
leading many to believe it had finally grown out of its decade-long recession.
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