The economy may suffer a significant downturn in a 2023 with soaring inflation, according to Capital EconomicsThe world’s third-largest economy, Japan, is likely to enter a recession in 2023, Capital Economics told CNBC on Tuesday. The warning comes as inflation in the country hit the highest in over four decades in October, driven by a weak yen and imported cost pressures.According to Marcel Thieliant, senior Japan economist at the consultancy, the recession will “mostly be driven by a drop in exports and also by becoming more cautious, which is typically what you see when exports start to fall.” Japan recently reported a larger-than-expected trade deficit of $15 billion for the month of October. Statistics show that exports rose by 25.3%, slower than a year-on-year growth of 28.9% seen in September. Meanwhile, imports soared by 53.5% on an annual basis in October, higher than a year-on-year growth of 45% in the previous month.The government is due to release a revised third quarter GDP report on Thursday. Analysts polled by Reuters expect a 1.1% annualized contraction for the July to September period. That would follow a 1.2% contraction in the previous quarter and could mean the economy is already headed for what is commonly categorized as a technical recession, or two consecutive quarters of negative growth.Thieliant assumed that the Bank of Japan will stick to its ultra-dovish monetary policy and will not start raising benchmark interest rates, especially amid recessionary concerns.“The [central] bank has indicated that it wants to see sustainable inflation and the kind of cost-push inflation that we are seeing now is not sustainable,” said the economistThis article was originally published by RT.
- Syria and Turkey united in massive 7.8 earthquake
- Labor won’t adopt ‘economy-wrecking’ Greens policies.
- Bitcoin Price Prediction as $20 Billion Trading Volume Comes In – Can BTC Reach $30,000 This Month?
- FBI Seizes $260,000 in NFTs and Cryptocurrencies After Tip-Off By Twitter User.
- Apple, Google profits squeezed on China, sluggish economies.
- Markets are surging as fears about the economy fade. Why the optimists could be wrong
- Finnish coal consumption soars.
- Russia’s LNG production hits record high.