Japan is the first country to officially go into recession due to Coronavirus and many countries have gone before in the recession, but because of the specific coronavirus epidemic which has spread across the world, Japan is one of those big economies. The first country is formed which is in recession.
So, what does the recession mean first of all? The economy is not necessarily always going forward; the economy goes up, then a situation arises, due to which it comes down, then it goes up and comes down. We call it the economic cycle. But when your economy is coming down and it comes down for a long time and when your GDP starts going into negative growth then we can call that situation as a recession.
That means there are a total of four quarters in a year, so if your economic growth has gone negative in two consecutive quarters. If we look at Japan, the fourth quarter of 2019, which was October-November, in the quarter of December, their GDP growth rate was -6.4%. From the current quarter of January to March, the GDP growth rate there has been -3.4%. Their GDP has gone negative for two consecutive quarters and this is why it is said that Japan has become the first country whose economy has gone into recession.
Japan’s GDP comes in at number three and its GDP is around five trillion dollars. So, it was 5 trillion, now it will start coming down from 5 trillion because earlier this production would not be as much as this year.
Now we come to why there is a problem with Japan’s economy. There are two major reasons in Japanese. The double effect has occurred in Japan. Coronavirus caused a major crisis, but many Japanese people and a lot of international experts were also shocked when Japan increased the sales tax in their country. What we are seeing today is that tax is being reduced everywhere, money is being added to people’s bank accounts.
Every country is trying to give money to the people, but see in Japan, the sales tax there is increased from 8% to 10%. So, these become two major reasons due to which the GDP of Japan is seen going negative. The supply chain that Japan has is the trade was largely dependent on China and the US, and at the moment we know what is the situation in China and the US. Corona cases and death figures in the US increased very rapidly, due to which both the supplies from China and the US were not getting good business.
Japan had not yet done a complete lockdown, the way we had seen a complete lockdown in our country for about one and a half months. Japan had not done a complete lockdown to their country even though they had just declared a state of emergency. -Different divisions come as there are districts in our country, in the same way, the divisions there are called provinces, so there are 39 out of 47 provinces in the state of emergency. Bone went deleted.
The impact of Japan’s economy has come a lot and it is believed that if there is such a big impact in Japan, then you will see a slowdown everywhere in Germany or France. Already, the first quarter was in Germany, France, China and there has been a negative growth rate but in Japan, it has been seen in two consecutive quarters, then there is something to fear. In all the big economies, we will see a slowdown in the coming times.
Japan has announced the largest package in the world, with a GDP of 5 trillion $, 20% means that it had issued a package of 1 trillion $. What effect this package will have on the economy of Japan will be known in the coming times. But there is a very big indication that in the future, there will be a lot of recession in the whole world.