Japan’s Economy Faces Many Headwinds in 2020
December 18, 2019
While economists are beginning to feel more optimistic about global economic growth, prospects for Japan remain muted. It was a rough year for Japan as the world’s third-largest economy saw its exports decline, as the slowdown in China reduced demand for Japanese-made parts. Domestically, retailers and consumers have been hurt by a national sales tax increase. The nation’s prospects for next year are unlikely to improve.
The Daiwa Institute of Research is projecting GDP growth of just 0.3 percent next year. After the last national sales tax increase, the economy took years to fully recover. Though the most recent increase was designed to be less detrimental, some retailers saw their sales fall by as much as 18 percent the month after the increase took effect.
The government announced plans for an economic stimulus program to boost spending and expand economic growth. However, some economists have criticized the presentation of this program, arguing that the majority of the money was intended to aid areas hit by a recent typhoon rather than lift consumption nationwide.