Japan economy has fallen into recession due to the pandemic. Moreover, the world’s third strongest economy fell by 3.4%. Read ahead to know more. Also, find out how coronavirus affected the global economy.
Status Of The Global Economy
The coronavirus pandemic has taken a big toll on the global economy. The Asian Development Bank has warned the world economy could face a hit between $5.8tn and $8.8 trillion.
The United States, the world’s largest economy suffered its worst economic decline since the Great Depression in 1930. Furthermore, their economy fell by 4.8%. This is the worst economic phase that the country has seen in the 21st century.
China, the world’s second-biggest economy saw an economic growth shrink of 6.8%. Moreover, it happened within the first three months of this year. However, both the superpowers have not confirmed falling into technical recession yet.
However, some senior economists say that we may expect both of them to fall into a technical recession in the coming months. Moreover, if the situation does not improve, the recession will have a long-lasting effect on the global economy.
Fall In Japan Economy
Japan, the world’s third-largest economy saw a 3.4% downfall in its economy. Moreover, it is its biggest downfall since 2015. The country has imposed a state of emergency in April of this year.
As a result, many supply-chain businesses and trade corridors are affected severely. Last year, Japan had a 6.4% decline during the last quarter of 2019. Adding the present decline, Japan has now into a technical recession.
Moreover, the country was going to host the Olympics this year. Japan committed 1.3 billion dollars into organizing the event. Also, the global event contributes a lot to the economy of the organizing country.
However, the event is postponed. Therefore, Japan will not be benefitted any sooner.
Stimulus Packages Announced
The Japanse Government announced a $1 trillion stimulus package in April. Furthermore, the Bank Of Japan expanded the stimulus for the second straight month in April 2020. Prime Minister Shinzo will announce the second budget at the month-end.
It will fill in the deficiencies that occurred due to the recession faced by the Japanese economy due to the coronavirus pandemic.