Aug 24, 2020, 10:30 EST
Bronx, United States, Aug 24, 2020, 10:30 /Comserve / -- Japan has recorded its worst-ever GDP contraction on record as its economy shrank by 7.8% in the second quarter compared to the first quarter according to the data released by Japan’s Cabinet Office.
Tokyo, Japan, 18, Aug 2020- Japan has recorded its worst-ever GDP contraction on record as its economy shrank by 7.8% in the second quarter compared to the first quarter according to the data released by Japan’s Cabinet Office. This contraction translates to an annual decline rate of 27.8% for the world’s third-largest economy. The quarter from April-June 2020 is the third quarter in succession when Japan’s economy has contracted, and it is the worst since modern records started in 1980.
Japan has already been struggling with its low economic growth even before this pandemic began because of the US-China trade deal problems and the hiked consumption tax last year. Coronavirus (COVID-19) pandemic only amplified Japan’s problems as businesses remain shut because of the lockdown measures for a long time, sending the economy into doldrums. Most of the global economies are facing a crisis, along with a severe financial impact because of this widespread disease. Like any other country, Japan is also facing a contraction in its economy with a drop in its consumer spending because of the restrictions which barred people from going and spending outside. Private consumption in Japan has dropped down to 8.2% in the second quarter because of the government’s limitations to curb the spread of the disease. Private demand decreased by 6.5%. Exports of goods and services which includes spending by foreign tourists slumped by 18.5%. Demand for auto parts and cars nosedived due to the hard lockdown restrictions all around the globe and tourists visiting the country were negligible because of the international travel restrictions to contain the disease’s spread. Imports posted a drop of 0.5%, and private capital expenditure dropped by 1.5%. The last time Japan recorded a contraction for three consecutive sectors was in 2010-11 from October-December 2010 to April-June 2011 because of the devastating earthquake and the Tsunami that wreaked havoc on the northeast area of Japan, coupled with weak private consumption.
Earlier, in April 2020, Japan approved a fresh stimulus of USD 1.1 trillion to combat the coronavirus pandemic for saving the Japanese economy from going into recession and from protecting the lives & lifestyle of the public. As per the latest data on 18th Aug 2020, Japan has done 1,214,145 tests with 56,685 confirmed coronavirus cases and 1,115 deaths. 42,284 have already recovered and are now hopeful of getting out of the chains of this pandemic soon.
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