It's bad enough that Japan, the world's second largest economy, has entered recession. But now we have reports that the numbers are even worse than we thought.
Last month, the figures showed Japan was shrinking by 0.4%. Now we learn the annual contraction is more than four times that at 1.8%. And it's going to get worse.
A large part of the problem is China which is now Japan's biggest trading partner. There are serious concerns that China's November economic data is going to be very poor.
But what makes it worse is that Japan is now the world's most indebted nation, worse than even the United States which is saying something. As Bloomberg reports, the Japanese Government is squeezing health care and social programs and instead channelling the money into roads and airports which will have little economic value. Many of these are white elephants.
Bloomberg reports: "Japan has borrowed money every year since 1965 to finance its budget, saddling each household with the equivalent of 17 million yen ($182,000) in debt. The spending has pushed the government's debt to the highest among the Group of Seven economies – 170 percent of annual gross domestic product last year, compared with 63 percent in the U.S., according to the Organization for Economic Cooperation and Development."
Add to that the policy deadlock which has given the four Prime Ministers in the last seven years.
It's going to get a lot worse in Japan, and that's bad for the global economy.
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