UK and Japan in recession
Tonight is about recession it was all the rage last year many economists were certain that the world would witness a downturn in 2024 and now it’s unfolding as we speak thankfully no doom stay scenarios yet this recession wave is picking its targets today two countries lived into a recession Japan in the United Kingdom both are major economies and both are shrinking.
Japan’s economy contracted by 0.4% the United Kingdom 0.3% this is for the last three months of 2023 now these economies have been steadily declining from July to September Japan dipped by 3.3% and the United Kingdom zero point one percent that was the depth now
technically a recession kicks in when an economy contracts for two straight quarters so if it sees a dip for six months straight it’s recession so going back to today’s numbers it is official there is a recession in the UK and Japan the UK’s decline is unexpected lines major sectors like manufacturing and construction and not firing.
the cost of living remains high and the pound continues to steadily weaken against the dollar and the euro for the entire year the United Kingdom grew by just zero point one percent which is hardly any growth the UK’s reporting its weakest numbers since the 2009 financial crisis and these numbers are certain to embarrass Prime Minister Rishi sunak when he took office one of his big promises was to grow the British economy what’s an arc and his team have ended up tanking it although the
UK’s finance minister does not see that way we always expected growth to be weaker while we prioritize tackling inflation Resilient than most people predicted the people of the UK agree they’re paying more for electricity and gas they’re paying a higher interest on their loan by this logic them in less than three weeks Jeremy Hunt will reveal his next budget with the UK recession he has his task cut out which brings us to Japan also in recession but it’s a totally different story today’s numbers come as a surprise to many observers Japan was not expected to slide into a recession it was the third largest economy in the world today it has lost that title to Germany the German economy is worth 4.4 trillion dollars Japan is now down to 4.2 trillion I think the fact that Japan Fell to fourth place for global economy size is a more serious matter than people originally expected the reason for the slide is foreign exchange rate in 2023 the average of the dollar yen rate was 140.5 Japanese Yen against one US dollar this indicates a historical weaken which makes the value of the yen weaker and a big reason why Germany over took
Japan and what is dragging down Japan domestic demand is week so is consumer spending which not will money which is not surprising inflation in Japan is at a four decade high so when the basics cost more most people start budgeting their expenses they spend less what is worrying is the decline in business activity Japanese businesses are spending less and that’s a matter of concern because when businesses tightened their bells workers usually get poor increments they could even be job cuts and such a situation
creates a cycle when workers get paid less they hold back their spending this can slow down the entire economy and if this trend continues Japan’s economy could remain in the Slow Lane for quite some time now the question is will more countries follow suit the more economies fall into a recession honestly it’s too early to say some experts claim this recession way won’t be like the previous ones it won’t stick around for a long time
UK and Japan in recession
the recovery could be quick but the optimists got another setback today from the European Union the EU has released you projections the eurozone has cut its growth forecast the earlier projection was was for one point two percent growth the new number is 0.8% which is not a recession but growth will be less than 1% so the negative sentiment is spreading whenever major economies dip into a recession it sends ripple ripples across the world other countries begin to worry it’s a bit like watching a stack of Domino’s fall with everyone hoping it doesn’t reach their side of the table
Video – https://www.youtube.com/watch?v=Xa3QyyETu_M
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