Each country is trying to get out of the current global recession by adopting stimulus measures, including the United States’ $787 billion stimulus package and Japan’s budgetary measures, which include ¥12 trillion in fiscal spending. But the prospects for the world economy are not bright.

The U.S. is suffering from a recession and credit crunch while Japan is seeing a sharp contraction of manufacturing with the layoffs of many workers, all of which casts a shadow over the global economy. In the last quarter of 2008, the U.S. gross domestic product decreased by an annualized 3.3 percent and that of Japan by an annualized 12.1 percent. The world’s No. 1 and 2 economies, respectively, bear the heaviest responsibility for reviving the global economy.

Mr. Dominique Strauss-Kahn, managing director of the International Monetary Fund, said last week that global economic growth could be negative for the first time since the end of World Word II. He called the global downturn the “Great Recession.”

His prediction is worse than predictions made about seven weeks ago. On Jan. 26, the IMF reduced its forecasts for 2009 global economic growth to 0.5 percent from the 2.2 percent growth forecast in November. The World Bank predicts at least a 1 percent contraction in the world economy this year and the biggest decline in world trade in 80 years.

Japan’s economic performance in the last quarter of 2008 was the second worst in the postwar years and much worse than the performance of the U.S. and euro-zone economies. Japan’s GDP in the first quarter of 2009 is also expected to see negative growth.

In January, Japan suffered a record current account deficit of ¥172.8 billion. The trade balance for merchandise logged a deficit of ¥844 billion, the biggest since 1985, as exports declined 46.3 percent from a year before.

Increasing domestic demand is the key to economic recovery and growth. The government should not lose any time in working out growth strategies in such fields as renewable energy sources, eco-friendly industrial products, agriculture and medical and nursing care services.

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