The East Asian country, Japan ’s economy shrinks in the fourth quarter of 2020 due to COVID-19 , the economy surged by 4.8 per cent over the year, its first contraction since 2009 at during the peak of Global financial crisis.
Analysts believe that the surge wasn’t that worse due to a strong October-December performance, which saw the economy expand 12.7 per cent from the last quarter.
The Exports and consumption, both are significant participant for driving the Japanese economy, private consumption, which builds up more than half of the economy, rose to 2.2 per cent in the first quarter of 2020, slowing by 5.1 per cent increase in the last quarter.
The news helped in sending Tokyo’s Nikkei 225 index rallying more than 1 per cent to break 30,000 for the first time in more than three decades.
Japan, like other countries even it had plunged down to a steep recession at the beginning of 2020, to contain virus the measurements which was implemented throttled the economic activity.
In most new cases slowdown allowed to business to bounce back in the second half, with net exports and domestic demand contributing to the improvement.
Spending on corporate investment and housing also rebounded
Takumi Tsunoda, the senior economist at Shinkin Central Bank Research said:
He expects that recovery to struggle because Japan lags behind the western economies in vaccine distribution.
“The conditions are such that Japan will not be able to avoid negative growth in the first quarter,”
“There is a high possibility that there will be a repeating cycle of coronavirus infections spreading and being contained this year, which means that consumption is not likely to recover at the expected pace.”
In the first quarter of 2021 the decline of GDP seems to be unavoidable due to the state of emergency declared by the government in a number of Japanese prefectures said a senior economist
