Japan Officially Enters Recession

The world’s third largest economy officially enters into a recession. This is the third recession over a span of 12 years for Japan. Some suggest, Japan never recovered from the 2008 crisis.

Is the pandemic entirely to be blamed?

The Japanese economy has been stagnant for decades now.
It’s GDP fell 3.4 % from January to March.

The worst came in October to December period when the GDP fell by 7.3%. That’s 2 consecutive quarters of substantial decline in GDP.

And this has pushed Japan into a recession. The last time an eastern superpower entered recession was back in 2015.

Japanese economy in the recent times has been relying on tourism which accounts to almost 8 percent of it’s GDP.

Borrowing rates has slipped below zero and will perhaps remain so for atleast another year. One out of five companies is running out of cash currently.

In April, Japan’s exports fell the most since 2008 global financial crisis.

There are fears that Japan could slip by over 22 percent in April-June quarter.

The consumer spending had considerably dropped since October after the government hiked on consumption from 8 to 10 percent.

The real nasty side is yet to arrive as the economy will record a negetive growth for 3 consecutive quarters.