Despite Unveiling A Whopping $1 Trillion Stimulus Package, Japanese Economy Plunges In To Recession  Japan’s Prime Minister Shinzo Abe (Representative Image) (TORU YAMANAKA/AFP/Getty Images)

Despite unveiling a record $1 trillion stimulus package, Japan’s economy shrank 3.4% in the first three months (January to arch) of 2020 compared to a year ago, representing its biggest slump since 2015, BBC reported.

Japan is the world's third-largest economy after US and China.

Analysts expect Japan’s economy to further shrink 22% during April to June quarter, which would be its biggest decline on record.

The Japanese government has already announced a record $1 trillion stimulus package, and the Bank of Japan rolled out massive liquidity enhancing measures in April.

Unlike other nations, Japan did not opt for a stringent national lockdown. However it declared a state of emergency in April which severely disrupting supply chains and businesses in the trade-reliant nation.

Private consumption fell 0.7% in the first quarter as people refrained from leisure and dining out to avoid infection. Capital expenditures by companies dropped 0.5%.

Japan was already reeling under the impact of drastic drop in consumer spending dropped after Shinzo Abe-led government last October increased a tax on consumption to 10 percent from 8 percent in a move to help pay down the national debt and and fund social services as the country’s aging population. Japan’s national debit is already the the highest among developed nations. The country’s GDP suffered a 6.4% decline during the last quarter of 2019

The outbreak of coronavirus pandemic has resulted in plunging of Japan’s exports. The country was also forced it to postpone the Olympics.

An Appeal...

Dear Reader,

As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.

Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.

We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.

Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.

Become A Patron
Become A Subscriber
Advertisement