Japan Recorded Worst GDP On Record

Japan Recorded Worst GDP
On Record 

On Monday, Japan released its worst Gross Domestic
Product (GDP), which fell by 7.8% for the second quarter of 2020. The GDP data
is normally used to measure the growth of a country’s overall economy in terms
of its goods and services, where a positive figure indicates overall economic
growth. In contrast, a negative figure indicates overall economic contraction
over two periods of time.

Japan’s economy represents the third-largest economy
in the world by nominal GDP comparison, just behind the US. However, due to the
Covid-19 pandemic, its economy had been crippled to its worst-performing level
in history. Japan’s domestic consumption, which accounts for more than half of
its economy, declined 8.2% for the second quarter amid the country’s six-week
national emergency lockdown in April and May. The pandemic’s impact also
jeopardized global trade, contributing to a 3 percentage point decline in
overall GDP in terms of external demand.

As the outbreak of the virus continues, Noriko Hama, a
professor from Doshisha University, criticized the government for their lack of
response in policy utilization, claiming that a more cautious and broad
response is needed to counter the situation as such. Since the outbreak, the
country has announced massive fiscal and monetary stimulus to bolster the
pandemic’s damage.

Economic Minister Yasutoshi Nishimura also
acknowledged the severity of their GDP readings; however, he also stated that
consumption had picked up recently amid the re-opening of Japan’s economy.
However, after re-opening in May, Japan is now threatened with the recent surge
of infections, which could further jeopardize its economy. As of writing, Japan
recorded 55,426 confirmed cases and 1,101 deaths from the pandemic. Some
analysts warned that local companies would start to cut jobs and spending if
global demand remained at low levels while number of infections surge.