Japan’s economy certainly looks to be one of the worst case scenarios globally at the moment. Indeed, as Claus Vistesen puts it (in a very fine and thoroughly argued post – Engine Failure – that you can see here): “Final estimates from Q4 2008 suggested that Japan contracted at an annualized 12.1% which puts Japan in the dubious pole position of biggest GDP declines among industrialised economies.”

This record breaking negative performance seems in danger, not only of being repeated, but even of being surpassed, in the current quarter, since Japanese industrial output slid for the fifth month in a row in February as falling exports gradually took their toll on the entire conomy, with production being down 38.4% year on year. So, as we move towards the G20 meeting later this week, one thing is blindingly obvious: any decisions which don’t address the tricky question of how to get global trade moving again are going to fall well wide of the mark.

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Both the EU Economic Sentiment Indicator (ESI) covering the EU 27 and the eurozone only one declined again in March, though the pace of decline was slower than in the first two months of the year. The indicator fell by 0.6 points in the EU, and by 0.7 points in the euro area, to 60.3 and 64.6 respectively. As a result the indicators for both regions now stand at their lowest levels since the current series was launched in January 1985. Continue reading →

Ukrainian President Viktor Yushchenko speaking in the parliament yesterday (Tuesday) called for concerted action to reverse a drop of up to 30 percent in economic output which is in the process od destroying jobs and sinking living standards. Yushenko said the country was “ill-prepared to confront a crisis” which may have lead to a fall of 25-30 percent based on figures from January-February 2009. According to the Kyiv post:

The president urged politicians to end the rows which have thwarted reform efforts as Ukraine gears up for next year’s presidential election. He also proposed political change, including the creation of a second chamber of parliament. “We were ill-prepared to confront the crisis and its first blow was painful and difficult…,” Yushchenko told deputies.

“The consequence of this was a slowdown in GDP growth in 2008 to 2.1 percent…and a destructive fall of 25-30 percent according to figures from January-February 2009.”

Growth in the first two months of 2008 was 5.8 percent.

“Before the crisis, (annual) growth rates in the Ukrainian economy stood at 6.5-7.0 percent. I believe, I am certain that this indicator will be restored,” the president said.

“We have lost our foreign markets and 60 percent of Ukrainian exports. All our foreign currency earnings depended on these markets as did the jobs of nearly two million people in steel, chemicals and related sectors.”

Well having just quoted Claus to the effect that Japan’s economy was occupying pole position in the global contraction, I would now readily have to “correct” and admit that Ukraine are obviously playing in another league, and even though all statistics in Ukraine are “political statistics”, looking at the sort of data I’ve been looking at, the order of magnitude seems about right. The contraction is massive. And even though Ihor Burakovsky’s earlier estimate of a 12% annual contraction for the year now looks to be a little dated, that was an annual (ie all 2009) forecast, and may not be that far from the mark by the time we reach the end of the year. So with that in mind, and taking into account that we have little in the way of really new data at this point, I am simply upgrading and reposting my earlier post, for those who may not have seen it. Continue reading →