Japan has entered the “full-blown” recession amid Coronavirus Outbreak
GDP data which was presented on Monday portrayed that, the third largest economy in the World has slipped or entered into recession for the very first time in the duration of four and a half years. The economy of Japan shrank for the second continuous quarter, which escalated the hurdles for policymakers who are combating a once-in-a-century pandemic that has just caused boundless disturbances. It has been reported that GDP has contracted an annualized 3.4 in the main quarter as capital expenditure, private utilization as well as exports plunged.
It was observed that, the previous time Japan witnessed such a recession was during the year 2015 (second half). Yuichi Kodama who is the chief economist at Meiji Yasuda Research Institute stated that “It’s near certainty the economy suffered an even deeper decline in the current quarter,” and he also added that Japan has slipped into a “full blown” recession.
The sector that represents a greater part of Japan’s $5 trillion economy i.e. the private consumption plummeted 0.7 per cent, versus a drop of 1.6 per cent that was forecasted by the business analysts. This denoted the subsequent straight quarter of decrease, as family units were hit by the double-whammy of Covid-19 and a tax on sales climbed to 10 percent from 8 percent in the month of October a year ago.
Conditions are forecasted to have exacerbated in Japan in the present quarter after Prime Minister Shinzo Abe, who is the Prime Minister of Japan announced a nation-wide lockdown and a state of emergency in the month of April in the midst of an ascent in coronavirus diseases.