Quake Sent Japan Back Into Recession

Exports, domestic spending hit hard by disasters
By Rob Quinn,  Newser Staff
Posted May 19, 2011 4:00 AM CDT
Quake Sent Japan Back Into Recession
A car hangs atop a damaged warehouse in a port area devastated by the March 11 earthquake and tsunami.   (AP Photo/Junji Kurokawa)

More misery for Japan: The triple disasters that struck the country in March sent the country's economy sliding into its second recession in three years, according to the latest government figures. The earthquake, tsunami, and nuclear crisis disrupted production and caused a collapse in consumer spending, reports the BBC. Japan's economy shrunk at an annual rate of 3.7% in the first quarter of this year, a drop almost double what economists had predicted.

Analysts say reconstruction demand is likely to spur growth later in the year, but things are expected to get worse before they get better, the New York Times notes. Companies struggling with energy shortages are having a hard time restoring damaged production and supply lines. Japan estimates that the total cost of the disasters will top $300 billion. (More recession stories.)

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