New Delhi (NVI): Japan, the third-largest economy in the world, has entered recession amid the coronavirus pandemic as its economy shrank 3.4 per cent from the previous quarter in the period of January-March, according to reports in foreign media.
This decline is being witnessed for the second consecutive quarter in the country, as per the Japanese government data.
The country now meets the technical definition of a recession of at least two consecutive quarters of negative GDP – following a 7.3 per cent slump during October-December – for the first time since the fourth quarter in 2015, reports Kyodo News.
The recent GDP data shows the broadening impact of the outbreak, with the country’s exports plunging a record high since global lockdowns and supply chain disruptions affecting shipments of Japanese goods.
According to reports, Japan’s economy was already struggling before the outbreak. The economic activity contracted late last year as the country absorbed a sales tax hike and grappled with the aftermath of Typhoon Hagibis, a powerful storm that hit the country.
Although the virus started weighing on the country in early 2020, analysts warn that Japan’s first-quarter does not capture the full effect of the pandemic.
Meanwhile, private consumption, which contributes to more than half of Japan’s economy, fell 0.7 per cent — and that was before the government declared a state of emergency that led to nationwide restaurant and retail closures.
In addition to this, the Japanese government, meanwhile, has already announced a roughly $1 trillion stimulus package to protect the economy from the fallout of the pandemic. That’s equivalent to about 20% of Japan’s annual output. Japan Prime Minister Shinzo Abe’s administration is likely to announce even more measures before the end of the month, according to media reports.
Meanwhile, the country has reported 16,340 confirmed cases so far, with 756 deaths and 11,415 recoveries.
