Japan Inc shrinks 12.1 pct in Q4

Agence France-Presse

The world's second-largest economy contracted 3.2 percent in the three months to December - 12.1 percent on an annualized basis - as the global crisis choked off demand for cars, high-tech goods and other exports.

The revised figure was slightly better than the initial estimate of a 12.7 percent drop but it was still the worst quarter since early 1974.

"Exports fell off a cliff in the fourth quarter," said David Cohen, director of Asian economic forecasting at Action Economics in Singapore, who sees more trouble ahead.

In 2009 the economy is likely to shrink 5.7 percent, "which would be the worst year since the Second World War," said Cohen.

Japan is now shrinking much faster than many others, including the United States. The government says the crisis is the deepest since World War II.

Call for concerted action

Finance Minister Kaoru Yosano called for concerted action to jump-start the global economy. "We can make our policies more effective by each country taking fiscal stimulus measures simultaneously," he said ahead of a weekend meeting of finance chiefs from the Group of 20 nations.

Recent data point to another sharp contraction in the first quarter of 2009. Japan logged a record current account deficit in January as exports almost halved from a year earlier.