GDP of Japan drops by 4%

It was revealed that Japan's economy has begun to climb out of the abyss, as a result of recent improvements in manufacturing activity. Nevertheless, the country had faced its sharpest contraction on record in the first quarter, due to the global economic slump affecting its export sector first and domestic consumers later on. 26% decline in exports resulted in 4.2 percent decrease in the nation's growth rate. The government had reported its total GDP to have shrunk 4% in the first quarter from the previous one. 

However, economists are still concerned of the long-term prospects for the world's second-largest economy after the U.S., due to such reasons as aging and shrinking of its population and an inefficient service sector. Nonetheless, it is still forecasted that Japan could start recovering from the worst phase of the current recession earlier than the U.S. and some European countries, as the country’s economy depends on exports, which is expected to grow sharply once global consumer demand picks up.

Economic Planning Association, a group affiliated with the Japanese government, poll of forty economists polled this week showed that the economy will grow at an annualized pace of 1.1% on average during the April-June quarter. A month ago the predictions for the period made 1.5%.