Japan suffers worst economic plunge in 40 years, wipes out Abe-era gains

by   |  VIEW 1271

Japan suffers worst economic plunge in 40 years, wipes out Abe-era gains

Japan, the third-largest economy beside the North-West Pacific had been whacked away over the second quarter of the year, as the far-east Asian nation had reported a record downturn in economic activities while the pandemic outbreak had emptied shopping malls and dented demands of cars alongside other exports, eventually evaporating all the gains obtained during the era of Japanese PM Shinzo Abe.

Notably, as Govt. data released on Monday revealing third straight quarter of contraction for the Japanese economy that rubs out the gains brought in by the Japanese PM Abe’s “Abenomics” stimulus policies deployed back in the late-2012s, had called for bolder policy actions, Japan’s economy had dived to a 40-year low on record.

Japan suffers worst economic slump since comparable data became available in ‘80

On top of that, while many optimist economists were quoted saying that coupled with a series of monstrous stimulus packages alongside fiscal policy easing, an ease of lockdowns in major Japanese cities, would likely to lead to a sharp rebound over the third quarter of the year, sceptics remained fretted that a renewed rise in pandemic cases would likely to keep a lid on the gains.

In tandem, according to Govt. data released on Monday, the world’s third-largest economy had experienced a contraction of 27.8 per cent over Q2, 2020, making Japan the second-largest hit from the pandemic-induced fiscal slump among G7 economies after a 32.9 per cent decline in US GDP, however, an analysts’ poll had forecasted a shrinkage of 27.2 per cent in Japan’s Gross Domestic Product during the April-June quarter.

Apart from that, as of June 30th, while the size of Japanese economy contracted to 485 trillion Japanese Yen, its lowest level since Q2, 2011, over the second quarter of the year, voicing a cautiously optimistic tone for the third quarter of the year, a chief economist at Norinchukin Research Institute, Takeshi Minami said following release of the data, “The big decline can be explained by the decrease in consumption and exports.

I expect growth to turn positive in the July-September quarter. But globally, the rebound is sluggish everywhere except for China.