As Japan’s GDP data shows its reduced growth for the second consecutive quarter, the COVID-19 hit nation has slipped into recession sparking fears that that the situation could worsen in the coming months.
GDP contracted an annual 3.4% this quarter due to fall in private demand, capital expenditure and decline in exports. Earlier in the October- December 2019 quarter, the growth had contracted by 7.3%.
Private consumption which contributes to more than half of the USD 5 trillion economy has fallen by 0.7%.
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This has also been attributed to the government’s decision to increase sales tax levied on goods to 10%. This was previously at 8%.
The virus has also hit various export markets around the world. As per data obtained, Japanese exports contracted by 6%.
Japan like India is also facing the problem of jobless growth. The availability of jobs is drying up as economy shuts down due to the lockdown imposed by the government to deal with the virus.
India has reported its unemployment rate at over 20% in recent times.
The US only recently reported over 33 million people signing up for receiving unemployment allowances.
This data has increased fears that the situation is only about to get worse.
Japan experienced its last recession in 2015.