Japanese Economy Suffers Record 27.8% Slump


The Japanese Gross Domestic Product (GDP) suffered a 7.8% drop in the second quarter of 2020, marking a record 27.8% drop on an annualized basis as the nation combats the Covid-19 coronavirus pandemic. Earlier this year, Japan slipped into economic recession after experiencing two successive quarters of economic decline. Japan's GDP is now at decade-low levels, wiping out the effects of economic stimulus policies spearheaded by Prime Minister Shinzo Abe in late 2012.  

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According to Japanese economists and analysts, two main factors behind the slump includes a severe decline in domestic consumption, which accounts for well over 50% of the Japanese economy, and a sharp fall in exports. Domestic consumption fell 8.2%, capital expenditure fell 1.5%, and the automobile industry also suffered large declines while overseas shipments fell 18.5%.

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This third successive declining quarter puts additional pressure on the Japanese economy that was already suffering slowdowns prior to the Covid-19 pandemic, struggling with the effects of a sales tax hike up to 10% in 2019, and combating the estimated 15 billion United States dollars worth of damage brought by 2019's Typhoon Hagibis.

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Note: All photos used in this article were retrieved from the public domain, and do not require attribution or citation for commercial purposes. 

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World International News Group
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