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August 18, 2020

Japan experiences biggest economic slump in years – US shows signs of recovery

By Paul Dennis

18 August

The third largest economy in the world, Japan’s economy is experiencing the biggest economic downturn in years.

Despite fiscal and monetary measures consumption and exports have remained low signalling a deeper recession unless improved policy actions are implemented.

Christophe Barraud, an economist, shared an article on Japan’s economy experiencing the biggest slump in the second quarter of 2020 at 27.8%.

The real GDP level of the country has declined to record low levels for the first time in decades despite injecting fiscal stimulus into the economy to deal with the impact of the pandemic.

The decline in Japan’s GDP is being attributed to the decrease in consumption and exports although a rebound is being projected for the July-September quarter.

The possibility of a surge in Covid-19 infections has, however, cast doubts on the outlook and highlighted the need for more policy action to prevent the country from going into a deeper recession.

Meanwhile, Lars Christensen, an economist, notes that a V-shaped recovery for the US economy is underway, although the stock market may face tough times in the future.

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