The current financial crisis is hurting the retail businesses of many nations, and Asia is no exception. Unlike China, which has managed to deal with the global recession admirably, other countries in Asia are suffering from a downturn, growing unemployment, and a drop in exports, production and private consumption. Japan and Singapore are two countries that have suffered this fate. %% June 2009 was the tenth month in a row in which the Japanese retail market has diminished. The main reason for the deterioration is the bleak status of the local employment market, which has been struck by increasing layoffs. The latter has lead consumers to cut back substantially on their spending. In June, retail sales in Japan declined by 3 percent compared to last year, and amounted to 10.65 billion yen, the Japanese Ministry of Economy, Trade and Industry reported. %% As if that weren’t enough, it seems that for the first time since February, the rate of the downturn accelerated instead of moderating. It is possible that this is a sign that the government stimulus plan, which was supposed to increase the scope of consumer purchases,, had a strictly limited effect. Department stores, supermarkets and major sales points posted even worse performances – sales dropped 5.1 percent in June, sliding for the 11th month in a row. %% Maybe it is not all bad - lately there have been signs that Japan is starting to recover from the most severe recession it has experienced since World War II. Its exports and manufacturing are rising, and many expect the recovery to continue. Nevertheless, local demand – which constitutes more than half of the world's second largest economy – is very weak, and economists are concerned that this could lead to a drop in prices and further delays in the recovery rate. %% The crisis has not skipped Singapore either. The latter is suffering from the worst recession it has seen since gaining its independence in 1965. Retail sales in Singapore have dropped over 10% so far this year as compared to last year. The luxury products sector sustained a particularly severe blow, and the sales of jewellery, luxury cars and furniture posted sharp declines. However, the economy of Singapore has also posted some encouraging signs recently, and the local government increased its forecast for growth in 2009. The economy regressed at a lower rate than expected in Q2 following a growth in industrial production, which helped save the country from the recession. The economy of Singapore dropped by 3.7 percent in this quarter, but the decline was smaller than the economists' forecast of 5.4 percent negative growth. %% Even at the crisis's peak, Singapore never lost its conviction that the recession could not impair the locals' love of shopping. Three giant shopping malls are being built these days on the island, and the entrepreneurs believe that they can thrive in spite of the crisis. The government plans to turn Singapore into a leading tourism and shopping hub in the region, and facilitate the recovery from the crisis by doing so. Part of this massive plan includes the renovation of the famous Orchard Road shopping mall, and the construction of two more sites, including the first casino in the country, which is expected to open next year. Still, retailers who operate at the Orchard Road Center – which includes 40 shopping malls spread over some 2.5 square kilometers – believe that the sluggish sales might continue for some time. Both locals and tourists are spending less money, and the opening of many more stores in the area will only increase competition and cut profits even further. %% Singapore is trying to maintain a sense of optimism: The local Ministry of Trade recently published a forecast according to which the local economy would post a negative growth rate of 4-6 percent this year, in contrast to a previous forecast, a darker one, of 9 percent negative growth. In these difficult times, such figures are a basis for optimism.

Courtesy : Israel Diamond Portal