Japan's economy shrank more than government's initial estimate

Oddly, Im not inclined to believe a single word that comes out of the government about anything these days.

Japan lost its place as the world’s No. 2 economy to China last year. It has faced a slew of problems including years of deflation and a rapidly aging and shrinking population.

...and same factor will take Japan further down within a decade or so.

@some14some

...and same factor will take Japan further down within a decade or so.

You know, I am not very happy to read such a comment as it is a sober assessment and there is a great chance of coming true. Many years ago a poster said that Japan might easily become a second North Korea.

I have always believed that Japanese have some extraordinary strength and ability to stand up even when they K.O.d and restart everything and do it even better. Now, it seems they numbed in their downward spiral to an extent when they either rather leave Japan and find a better place to live or just let her go down while the obligatory looting starts and the vultures (politicians, executives etc.)in high position would abandon all their efforts and start robbing the country and take everything that left.

Also, I expect more and more companies and land to be sold out. Karuizawa for example is practically sold out to Chinese, they buy all the lands in Japan that is rich in water, companies are looking for foreign investment, the Japanese trademark money policy is failing.

huhhh I am not very optimistic either.

I think Japan is still #2. I don't trust China's numbers.

Patrick Smash......combined with a stronger (more realistically-priced yen)

so, according to you, japan's actual GDP (based on Patrick Smash's PPP) per capita is by far the highest in the world ( i.e., by far the wealthiest in the world). the shrinking number of japanese would enjoy their huge savings both at home and abroad (by far the largest NET external assets worth trillions of euro/dollar), and they would buy up the best companies, land, products, etc. of the world with a even more stronger yen (more realistically-priced yen according to Patrick Smash) . really rosy!

This is not going to be like Lehman shock when things kept getting worse.

Beg to differ. Japan's long term economic outlook is bleak. The high-end technical sector may provide some relief but even the big J companies are moving so many services and manufacturing jobs off shore. There's no population growth nor immigration to stimulate domestic growth either. Would the last one turn off the lights as they head out please.

Japan is pioneering a new type of economy - the "post-growth" economy. Many western countries are not far behind. It will be very interesting to see what the J economy is like in 20 years time.

mrsynik -- completely agree. Besides...

Government stimulus spending, designed to help along recovery efforts in northeastern Japan, is likely to combine with growth in the private sector, including consumer spending, to show expansion in the next quarter economic data, Osanai said

makes no sense. Spending on the recovery won't truly improve consumer spending in a structural way. And so long as domestic demand continues to shrink, and reliance on exports continues to remaining high, Japan is extremely vulnerable to economic fluctuations. Plus, with interest rates at near zero and borrrowing already way too high, there are real limits on what the government can do.

melguySep. 09, 2011 - 07:06PM JST 　Japan is pioneering a new type of economy - the "post-growth" economy. Many western countries are not far behind

some differences as well. for example, japan was/and still is the world's top creditor nation, with by far the largest NET external assets worth trillions of euro/dollar. on the other hand, the US, UK, and many others are debtor countries borrowing a lot from foreigners to support their economy. (but, Germany, for example, is a creditor nation) so, the actual "post-bubble",/"post-growth" comparison should be more complicated.

Japan lost its place as the world’s No. 2 economy to China last year.

I do not care if China is 2nd place or not. The market here is in a major sell off. Japan, tighten your belt and do everything to avoid your economy to get off the cliff. Be proactive and bold in this situation.