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Japan's economy falters, country in recession

From Kyung Lah, CNN
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Japan's economy in recession
STORY HIGHLIGHTS
  • GDP falls by an annualized rate of 3.7% in the first quarter of the calendar year
  • Drop is much steeper than Japanese economists had predicted
  • In the fourth quarter of 2010, GDP fell 0.8% compared to the same quarter of 2009
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Tokyo, Japan (CNN) -- Japan's economy, sputtering since the March 11 earthquake, tsunami and nuclear disaster, has fallen into recession, according to government figures released Thursday.

The country's gross domestic product fell by an annualized rate of 3.7% in the first quarter of the calendar year, according to the government, a much steeper fall than Japanese economists had predicted.

Comparing the first quarter to the previous year, according to Japan's cabinet office, the GDP fell 0.9%. In the fourth quarter of 2010, the GDP fell 0.8% as compared to the same quarter of the previous year. Thursday's GDP figures show a second consecutive quarterly drop, which fits the economic definition of a recession.

Industrial output in March was down 15.3%, the worst monthly drop in the country's history.

Businesses in the region affected by the tsunami were hit hard, with 10,000 of 24,000 businesses affected and 600 expected to close.

The figures, which did not include data from tourism or trade, underscore the fact that the natural disaster of March has become an economic disaster.

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