With over 20 million people infected across the world, the ongoing coronavirus outbreak seems to be showing no signs of abating. As the effective vaccine is yet to arrive in the market, lockdown restrictions remain the only way to reduce its spread. Consequently, these measures have pushed major economies of the world into a deep recession.
As per the latest news, Japan, the world’s third-largest economy, has slipped into recession with a significant decrease in domestic consumption, which accounts for over half of the nation’s economy.
The GDP (Gross domestic product) of the nation is reduced by 7.8% in the last three months ending June or 27.8% on a yearly basis. One of the main drivers behind the fall was a significant decrease in exports as global trade has taken a major hit by the pandemic.
Sources cite that Japan was already struggling with slow economic growth before this crisis. The nation slipped into a recession prior this year following two consecutive quarters of economic contraction.
Figures indicating GDP decline for the April-June quarter was the largest decline since comparable figures become available in 1980 and was slightly better than experts had expected. The ugly numbers for Japan’s GDP growth in the previous quarter highlight the worldwide impact of the COVID-19 pandemic and point to a difficult road ahead.
Japan is recent in a string of Asian nations to report extremely lower Q2 GDP data. Major economies across the globe are already facing their shrillest downturn in years as people preferred to not spend money while staying at home.
Despite Japan is in the midst of the second wave of COVID-19, its healthcare systems are not overwhelmed, and new COVID-19 cases have also started to decrease. Some analysts believe that Japan would do better as compared other economies across the world and its GDP growth may bounce back in the third quarter of 2020.
Source credit - https://www.bbc.com/news/business-53802967