Japan’s economy contracts amid virus outbreak, on brink of recession

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Japan’s economy contracts amid virus outbreak, on brink of recession

Earlier on Monday, the 17th of February 2020, Japanese Government data had sparked up fears of a global-scale slowdown amid a fast-spreading coronavirus outbreak mostly affecting the eastern part of Asia, as the world’s third-largest economy behind United States and China was contracted at the steepest pace in more than six years on December 2020, as an introduction of tax hike on sales had grievously hurt consumers’ sentiment and business demand, while a coronavirus outbreak breathing fire in its neighbouring China had chopped off investors’ sentiment further and chilled global economic outlook.

Besides, as Japan’s economy shrank by 6.3 per cent during the quarter that ended of December 31st, 2019, marking up the index’s largest drop since the second quarter of 2014 when a similar incident to hike taxes had crumbled consumptions, several analysts said that Japan, which has the second-highest numbers of coronavirus infected patients after China, could experience another contraction in Q1, 2020 with its damaging tourism industry and industrial output, if the far-east Asian nation could not contain the virus outbreak.

Meanwhile, referring to a devastating financial fallout of China’s Wuhan coronavirus outbreak, an executive research fellow at NL1 Research Institute, Taro Saito said on Monday (February 17th) followed by the release of Government data, “There’s a pretty good chance the economy will suffer another contraction in January-March.

The virus will mainly hit inbound tourism and exports, but could also weigh on domestic consumption quite a lot. If this epidemic is not contained by the time of the Tokyo Olympic Games, the damage to the economy will be huge. ”