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Japan plunges into depression * Peter Martin * February 17, 2009 AUSTRALIA'S biggest and most reliable customer, Japan, has plunged into depression, with federal Treasurer Wayne Swan now warning of the worst global downturn "in our lifetimes". - Japan among worst hit - Businesses forecast losses - Australian export fears Japan's economy shrank an annualised 12.7 per cent over the December quarter, its worst result since the 1974 oil shock. Japan is by far Australia's biggest export customer, accounting for one in every five container ships that leave Australia's shores. The new figures put it among the worst-hit casualties of the global crisis. The annualised contraction of 12.7 per cent, or 3.3 per cent in quarterly terms, dwarfs those of the United States and Europe and is much worse than anything that happened to Japan during its so-called "lost decade" of recession in the 1990s. The collapse in growth fits the profile of a depression — a deep recession in which annual GDP falls by 10 per cent or more.///
JAPAN'S economy, the world's second-largest, shrank at the rate of almost 13 per cent in the final three months of 2008.
Round two: The Japanese economy will soon see a second financial stimulus program, the third since September 2008. Picture: Bloomberg
In real terms, adjusted for deflation, Japan’s gross domestic product fell 3.3 per cent on the previous quarter, or 12.7 per cent annualised.
The contraction is Japan's sharpest in almost 35 years, since the first "oil shock" of 1973/74.
By at least one definition - a deep recession in which annual GDP falls by 10 per cent or more - Japan is headed into a depression.
Economy Minister Kaoru Yosano said today the Government would soon produce another economic stimulus programme, the third since September.
"Doing nothing after we see these miserable economic numbers is tantamount to the negligence of our duty."