Japan′s economy has unexpectedly slipped
into recession,… setting the stage for Prime Minister Shinzo Abe to call snap general election.
Sources in Japan say Abe plans to schedule the election for December 14th.
Song Ji-sun reports. Japan slipped into an unexpected recession
in the third quarter after logging negative growth for the second consecutive quarter.
The world′s third largest economy marked negative 1-point-6 percent growth for the
July to September period,… far below the market expectation of a 2-point-1 percent
bump. In macroeconomics, two or more consecutive
quarters of economic contraction typically signals recession.
While exports and consumer spending returned to gains last quarter, they weren’t strong
enough to offset the impact of a slump in stocks of unsold goods, which means companies
can′t move forward with additional production. This follows an over 7 percent yearly drop
in the second quarter,… recorded right after Tokyo hiked its sales tax from 5 to 8 percent
in April. That was the biggest fall since Japan′s
deadly earthquake and tsunami in March 2011. Monday′s figures pushed the benchmark Nikkei
down nearly 3 percent to just below 17-thousand,… with the Japanese yen exchanging at a 7-year
low at lower than 117 yen against the greenback during trading.
Prime Minister Shinzo Abe is widely expected call a snap election as early as mid-December…
in hopes of delaying an increase in the sales tax to 10 percent next year.
The hike was legislated by the previous administration to curb Japan′s huge public debt.
Japanese lawmakers say postponing the planned increase by a year-and-a-half could add about
half a percent to growth. Song Ji-sun, Arirang News.