Japan’s economy has declined severely to the extent of falling into recession for the first time in 4-1/2 years in the last quarter, official reports said on Monday.The nation’s downswing is due to the coronavirus, it has damaged the work flow of businesses.
The first-quarter GDP data has underlined the vast impact of the outbreak. It clearly stated there is a decline in exports, it is said to be the lowest since the March 2011 earthquake as global lockdowns and supply chains have disrupted the shipment of Japanese goods.
Consumption has reduced after the government requested citizens to stay home and businesses to close. This has widened the challenge for policymakers who are trying to battle a deadly pandemic.
“It’s near certainty the economy suffered an even deeper decline in the current quarter,” said Yuichi Kodama, chief economist at Meiji Yasuda Research Institute.
“Japan has entered a full-blown recession.”
Japan is the world’s third-largest economy, it contracted an annualized 3.4% in the first quarter, preliminary official gross domestic product (GDP) data showed, less than a median market forecast for a 4.6% drop.
The slump came on top of an even steeper 7.3% fall in the October-December period, with the consecutive quarters of contraction meeting the technical definition of a recession. Japan last suffered recession in the second half of 2015.
The corona virus, that emerged in China in the second half last year, has devastated the global economy as many nations went into strict lock-down to prevent further transmission of the virus. It has so far killed over 310,000 people worldwide.
On trade-reliant nations such as Japan itself, the virus has seemed to have a greater affect as it has massively disrupted the functioning of businesses. The customers have decreased their consumption hence impacting the economy further.
“Exports were also hurt by slumping inbound tourism,” which counts as a drop in non-residents’ purchases of Japanese services, he said