Japan in recession unsurprisingly given the economic convulsions of Covid-19
Kanako Mita and Lee Jay Walker
Modern Tokyo Times
The economic convulsions of coronavirus (Covid-19) and declining economic activity mean nations face enormous uncertainty. Hence, Japan was already braced for the announced recession, just like other major economies.
Of course, 2020 was meant to be a year of economic growth based on the 2020 Tokyo Olympics and other important factors. Thus, Prime Minister Shinzo Abe increased the sales tax from 8% to 10% in October 2019.
Abe knew full well that the next quarter would suffer based on reduced consumption. However, with his plans to increase tourism, the Olympics, and other stimulus measures then Abe was optimistic that a bounce-back would occur.
Yet the economic Black Swan of coronavirus stopped all hope of a rebound in Japan. This relates to the reduction of economic activity internally and externally. Therefore, all economic powers face enormous convulsions.
The BBC reports, “The 3.4% fall in growth domestic product (GDP) for the first three months of 2020, follows a 6.4% decline during the last quarter of 2019, pushing Japan into a technical recession.”
However, unlike other major economic powers, Japan especially loathes high unemployment based on issues related to social cohesion. Hence, further economic stimulus measures will be taken – just like recent measures to cushion the blow.
NHK reports, “Exports plunged 6 percent as economic activity stagnated globally. Housing investment fell 4.5 percent, while corporate investment was down 0.5 percent.”
Japan, just like all major economic powers, is facing momentous uncertainty because of the coronavirus Black Swan. Yet, issues related to unemployment means that state intervention will persist until the gradual return to international economic activity returns.
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