The world’s third biggest economy shrank 3.4% in the first three months of 2020 compared to a year ago, its biggest slump since 2015.
The present pandemic ravaging the world is causing havoc on the global economy with an estimated cost of up to $8.8tn (£7.1tn).
Last week, Germany slipped into recession as more major economies face the impact of sustained lockdowns.
Japan didn’t go into full national lockdown but issued a state of emergency in April severely affecting supply chains and businesses in the trade-reliant nation.
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 while consumers have been hit by the dual impact of the coronavirus and a sales tax hike to 10% from 8% in October.
While Japan has lifted the state of emergency in 39 out of its 47 prefectures, the economic outlook for this current quarter is equally gloomy.
The Japanese government announced a record $1 trillion stimulus package, and the Bank of Japan expanded its stimulus measures for the second straight month in April.
Prime minister Shinzo Abe has pledged a second budget later this month to fund fresh spending measures to cushion the economic blow of the pandemic.
Japan also relies heavily on exporting its goods and has little control over consumer demand in other countries which have been severely impacted by coronavirus lockdowns.
Tourism has also been affected as pandemic keeps foreign visitors away.
While economists predict Japan’s economy will shrink by 22% this current quarter, they also predict that the US could contract by more than 25%. The 3.4% decline also compares favourably to the 4.8% the US suffered in the first three months of this year.
This was the sharpest decline for the US economy, the world’s biggest, since the Great Depression of the 1930s.
China, the world’s second largest economy, saw economic growth shrink 6.8% in the first three months of the year, its first quarterly contraction since records began.
Both of those economies haven’t yet been confirmed as having fallen into a technical recession, which is defined as two consecutive quarters of negative growth, but most economists expect them to in the coming months.
Source: Voice of Nigeria