Japan enters recession as it struggles to recover

Japan has effectively entered a recession, after the Bank of Japan announced that the country's GDP (gross domestic product) has grown by only 2.8 per cent in the first quarter of this year. This is down from a 3.3 per cent prediction in January, which implies two quarters of decreasing economic activity.

The Bank also cut its growth forecast for the year from 1.6 per cent to 0.6 per cent.

Japan, which already had a national debt twice the size of its economy and an ageing population, is still struggling to recover from the devastating effects of the March 11 earthquake and ensuing tsunami.

But the Bank has chose to keep interest rates just above zero and continues to resist fiscal easing measures such as printing more money.

Read a full report at the Daily Telegraph. ·