The Japanese economy collapsed by more than 6%, and because of the coronavirus it could even be in a recession. Japan experienced a landslide drop in GDP in the fourth quarter of 2019. According to the government on Monday, in October-December, the size of the economy shrank 6.3% in annual terms and 1.6% from the previous quarter. The recession was a record since 2014 and almost doubled the average forecast of analysts
The fact that the Japanese economy will fall was predictable: this is the result of an increase in the “consumption tax” from 8% to 10% (an analogue of the sales tax). As a result, the volume of private consumption, which forms about 60% of GDP in Japan, fell in the last quarter of last year.
Also negatively affects the Japanese economy:
- Last October, typhoon Hagibis severely disrupted traffic and production chains in central Japan.
- Coronavirus (66 patients in Japan), this affects primarily trade with China.
- As a result, a combination of factors can lead to the fact that in the current quarter the economy will again be in the red. A recession for two consecutive quarters is a recession.