Third largest economy in The World, Japan falls into recession

Japan which has the third-largest economy in the world just slipped into recession. The outbreak of the pandemic disease in the country is likely to worsen the case.

According to data released by the government today, Japan’s economy declined by 0.9% between, January, February, and March in juxtaposition to the prior quarter. 

The 0.9%, however, is better than the 1.2% forecasted decline in a Refinitiv poll of analysts. Measured at an annualized rate, the decline was by 3.4%. Before the outbreak of the pandemic disease, the country’s economy was already affected.

Towards the end of 2019, economic activity shrunk as Japan experienced a jump in sales tax and also struggled with the consequences of Typhoon Hagibis that affected Japan during 2019 fall. Japan is in the second quarter of economic decline.

According to analysts, the first quarter didn’t effectively capture the impact of Coronavirus on the economy as this was before the pandemic disease weighed on the East Asia country.

According to Tom Learmouth, the country’s economist for Capital Economics made known that the abrupt decline in output in the first quarter proposed that the spread of the pandemic disease already significantly impacted economic activity in March.

Learmouth stated that things make get worse as he predicted a 12% quarter-on-quarter jump. Before the Japanese Government declared a state of emergency and announced the closedown of restaurants and retails in the country, the country’s Private consumption declined by 0.7%.

This contributes to a huge part of Japan’s economy. Exports which are 16% of the country’s economy also declined by 6%. This is the most abrupt decline for the sector since 2011 after an earthquake and tsunami occurred in Japan.

The country’s government under Shinzo Abe made known that an estimated $1 trillion stimulus package would be used to salvage the economy from the impact of the pandemic. This is about 20% of the country’s annual output. More measures may be put in place by the country’s government.