As Coronavirus continue to hit global economy, Japan is not left out.The country drop in gross domestic product followed a 1.9-percent decline in the fourth quarter of 2019 as a tax hike and typhoons hit Japan hard
The country Households limit spending to essentials and companies cut investment, production and hiring to stay afloat amid the coronavirus pandemic.
However, the country Policymakers also have little control over the world’s demand for Japanese exports, a main driver of growth that could stay depressed for a long time due to covid-19 pandemic.
Two consecutive quarters of shrinking GDP confirm that the world’s third-largest economy after the United States and China fell into a recession and some analysts predicted the Japanese economy would suffer worse as the effects of the coronavirus become clear.
The country tourism has dropped by as much as 90 percent, industry and trade have shrank as the virus also forced the postponement of the Tokyo 2020 Olympics that was seen as providing a boost to the economy.
The crisis has put pressure on Japan policymakers to step up relief and stimulus measures that, at a record ¥117 trillion, already account for more than 20 percent of GDP.
In an attempt to mitigate the worst effects of the crisis, Prime Minister Shinzo Abe has pledged to give every citizen a cash handout of 100,000 yen ($930).
The Bank of Japan last month introduce BOJ which is also expected to introduce another lending program for small companies at an emergency meeting that could be held early as this week.
Japan appears to be doing better than other major economies. The U.S. and Canada are both forecast to shrink more than 25 percent this quarter, while the U.S. contracted 4.8 percent in the quarter ended in March.