The Japanese economy is suffering under the blows of the global outbreak. New data suggests that the country’s economy can now be considered in recession again (previously, it was classified that way back in 2015) as the GDP has slumped for a second consecutive quarter.
A drop of 3.4% in the gross domestic product is concerning for the large export-oriented economy. Q4 of last year brought a decline of 6.4%, so most statistical methods now classify the Land of the rising sun as suffering from a recession. It is important to note that these figures are annualized and would represent a 0.9% drop from January to March otherwise.
The analysis shows that a further drop of 22% could pummel the Japanese economy if the outlook does not improve.
Many of these results show that Japan heavily relies on private consumption, which dropped by 0.7%. Another essential contributor to the state’s economy – exporting – shrank by 6%, not an insignificant number as 16% of the budget comes from trade with foreign entities.
Prime Minister Shinzo Abe has spoken about providing a stimulus package if necessary. Japan issued a 1.1 trillion USD as an aid to households and loans to smaller businesses.