How Japan’s economy has been affected by the corona virus.

This article is from the BBC and it discusses Japan’s economic slump due to the corona virus.

Originally, Japan was one of the wonder stories in the corona virus pandemic, they had managed to prevent corona virus cases surging instantly like they did in Europe. However, Japan started to pick up infections and peaked infections later, showing that they weren’t immune to the virus. Now Japan continues to battle the virus, but new cases have began to slow.

The article states that Japan saw a GDP reduction of 7.8% from quarter 1(January-March) to quarter 2(April-June). Japan was the third largest economy in the world, but they were struggling with economic growth before the pandemic even began, and this slump has made their situation worse. The writer confirms the reasons behind Japan’s slump are a severe decrease in domestic consumption, which makes up for half of their economy, and a sharp fall in exports.

The article says that the lock down could lead to a vicious cycle where there is little consumption, low profits, unemployment and low confidence in the economy. The lack of confidence can lead to a lack of investment and further unemployment. The article continues to say how Japan will combat this slump. The prime minister, Shinzo Abe, introduced major stimulus packages to soften the impact of the pandemic and get the economy moving again and Japan are predicted to grow better than a lot of countries and rebound. Their growth is expected to continue in to next year.