Japan Suffers Drastic Economic Contraction, Now Faces Recession
February 18, 2020
The world’s third-largest suffered a big setback in the final months of last year. Japan’s economy contracted at an annualized rate of 6.3 percent in the October-December quarter, much worse than the 3.9 percent decline that economists had forecast. The primary reason was a sharp drop in consumer spending following a national sales tax increase that took effect in October.
The country now faces a technical recession, meaning two consecutive quarters of economic contraction. With the coronavirus, Japan is expected to see slowing consumption, production and tourism in the current quarter.
Some economists are calling for the government to enact a fiscal stimulus plan to halt further slowing.