Japan's Economy Returns to Recession, Impacting Global Stock Markets

On Monday, November 26, news agencies reported Japan's return to recession and its negative impact on several global stock markets. At the same time, according to AFP, British Prime Minister David Cameron warned of the possibility of another economic crisis worldwide. Japan, which has the third-largest economy in the world, experienced a growth of 1.6% in the second quarter of this year. This event has led Prime Minister Shinzo Abe to postpone plans to increase taxes in the country, and it is likely that he will decide to hold early elections. Mr. Abe intended to raise the sales tax to 10% next year. His government had previously increased taxes from 5% to 8% earlier this year. The Prime Minister, who returned to Tokyo from the G20 summit in Australia, stated that the country's GDP growth between July and September was not good. The recession in Japan's economy has occurred while the country's central bank had eased its monetary policies last month to prevent a further decline in economic growth. However, a Japanese economist told the Associated Press, "The impact of the sales tax was much more severe than expected." According to the report, investment in the construction sector has decreased by 24% compared to last year. Meanwhile, news of Japan's economic recession has negatively affected financial markets in the country and around the world, including in Asian countries, London, Frankfurt, and New York.