Japan Becomes 1st Country To Fall Into Recession

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RECESSION

Recession refers to a phase of the downturn in the economic cycle when there is a fall in the country’s GDP for some
It begins after the economy reaches a peak of activity and ends as the economy reaches its trough.
A common rule of thumb for recessions is two quarters of negative GDP growth.
‘A recession is a period of decline in total output, income, employment and trade, usually lasting six months to a year.’

Consumers in Japan have been hit by the dual impact of-
The coronavirus and a sales tax hike to 10% from 8% in October.
Japan is extremely vulnerable to repercussions from the pandemic given its dependence on trade with both China and the U.S.
Japan did not go into full national lockdown, but issued a state of emergency in April which severely affected supply chains and businesses in the trade-reliant nation.

Japan has lifted the state of emergency in 39 out of its 47 prefectures
Other major economies around the world are set to follow, joining Japan as well as Germany and France in recession, as efforts to contain the outbreak ripple around the globe.

Japan faces a unique challenge as its economy has been stagnant for decades, compared to the more buoyant economies of rivals the US and China.
Japan also relies heavily on exporting its goods and has little control over consumer demand in other countries.
Many of its biggest brands, such as car firms Toyota and Honda, have seen sales slump across the world.
Tourism, which has long been a boost to the Japanese economy, has also been hit hard.