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Japan’s Q1 Contraction Brings the World’s Third-Largest Economy into a Recession
May 18, 2020
Japan, like most of the world’s developed nations, saw an economic contraction in the first quarter. GDP fell 3.4% in the period from January-March, as the coronavirus outbreak reached the country late in the quarter.
Unlike many other nations, Japan headed into the crisis already in the midst of an economic contraction. GDP for the fourth quarter of 2019 fell 7.3% following an increase in national sales tax.
This means that Japan has seen two consecutive quarters of economic contraction, which is the definition of a technical recession. They are unlikely to end the streak any time soon, as analysts predict the current quarter could see a contraction as severe as 20%.
