Japanese Economy Contracts 4.8% in 2020

Japan’s pandemic-hit economy is gradually recovering by an annualized growth of 12.7 percent in October-December, despite its record slump of 4.8 percent in 2020, based on the latest government data.

The 4.8 percent contraction is the first since the 2009 global recession.

The Cabinet Office said that the economy’s did expand in the last quarter of 2020 due to an increase in exports and government spending.

The Bank of Japan (BOJ) said that while the economy is still in “a severe situation,” exports have consistently increased.

“Exports and production have continued to increase clearly, mainly for automobile-related goods, and also for a wide range of goods, including capital goods and IT-related goods.”

However, the BOJ added that the non-manufacturing industry has become stagnant once again, specifically face-to-face services due to the third wave of the coronavirus.

Senior economist Yusuke Shimoda of the Japan Research Institute said, “If state of emergency measures are lifted in March, Japan’s economy will probably rebound in April-June.”

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