Japan Faces Recession Due to Coronavirus Outbreak
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For the first time since 2015, Japan has sunk into recession as the coronavirus‘ financial toll continues to escalate. During the first three months of 2020, the world’s third-largest economy shrank at an annual rate of 3.4 per cent. The coronavirus is wreaking havoc with an approximate cost of up to $8.8tn (£7.1tn) on the global economy.
Germany fell into recession last week, as more global economies are facing the effects of extended lockdowns. Japan did not go into full national lockdown but provided a state of emergency in April that severely affected the trade-reliant nation’s supply chains and businesses. In the first three months of 2020, the 3.4% fall in domestic product (GDP) growth followed a 6.4% fall in the last quarter of 2019, dragging Japan into a technical recession.
Consumers in Japan were hit by the coronavirus’ dual impact and a sales tax hike from 8 per cent in October to 10 per cent. Although in 39 out of its 47 prefectures Japan has lifted the state of emergency, the economic outlook for such a current quarter is similarly dim. Analysts surveyed by Reuters expect the economy of the nation to fall 22 per cent during the period from April to June, which would be its largest record decline.
Japanese Government Launches $1 Trillion Stimulus Package
The Japanese government has already launched a historic $1 trillion stimulus package. It is for the second consecutive month in April. The Bank of Japan has increased its stimulus initiatives. Prime Minister Shinzo Abe has promised a second budget to finance fresh spending steps. It is later this month to soften the pandemic ‘s economic blast.
Japan is facing a unique challenge as its economy has stagnated for decades. It is especially in comparison to the more buoyant rival economies of the US and China. Japan is also heavily dependent on exporting its products. It has little control over market demand in other countries. It seriously affects by coronavirus lockdown. Many of its largest brands, such as car companies Toyota and Honda, have seen worldwide sales slump.