Japan and Germany are the great exporting countries of the industrialised world. They didn’t have the consumer booms seen in the USA and UK. Yet their economies are plunging, as export opportunities dry up.
Yesterday, the Japanese finance minister, Kaoru Yosano, told parliament that the country was in “an economic crisis”. These are strong words, but the facts support them. The government is now forecasting that exports will fall 28% this year, whilst industrial production will decline 23%.
Meanwhile, in Germany, a 5% fall in GDP is expected this year, as export markets dry up for major industries. In turn, this is influencing political debate ahead of September’s general election. The head of the powerful IG Metall union, Berthold Huber, is already questioning whether the country’s current “dependence on exports” is sustainable.
And as Nigel Davis has noted in an excellent ICIS Insight analysis on Japan, the downturn in exports will also lead to painful chemical company restructuring. The political fall-out from the export downturn is probably only just beginning.