Japan’s economy shrank at a rate of more than 12 percent per annum in the last quarter of 2008, with fears that the decline of Australia’s largest trading partner by revenue will adversely affect the Australian economy. The world’s second largest economy recorded a 3.3 percent decline in the three months to December 2008.
Japan relies on the export of manufactured goods such as automotives and electronics and a fall in the global demand for these items has led to hundreds of layoffs in those industries. Other parts of Asia have also suffered with recorded falls in exports from Taiwan (44 percent), South Korea (32.8 percent) and India (24 percent) in January.
“The fact we’re seeing such huge declines in Japan’s exports and imports casts a big shadow over the Australian economy,” remarked Macquarie Bank senior economist Brian Redican. Japan buys almost one quarter of Australia’s exports.
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