The world’s largest economies are feeling the pain caused by COVID-19 lockdowns across the world. While China and the United States continue to flirt with entering a deep recession, the world’s third-largest economy in Japan has officially crossed that threshold.
Japan’s GDP in the first three months of 2020 fell by over 3 percent from the same quarter last year. This drop in GDP was preceded by an even larger 6 percent drop to end 2019, and has officially put the country into recession territory for the first time in five years. The GDP in 2019 was over $5 trillion, placing the country in third behind China and the U.S. for largest economies in the world.
Unlike other countries, Japan has yet to enter a full national lockdown due to COVID-19 but did implement a state of emergency that heavily affected businesses and supply chains. The country has kept the virus case count and total number of deaths relatively low but still hasn't been able to avoid economic consequences.
Despite the state of emergency almost entirely lifted across the 47 Japanese provinces, analysts and experts predict the current quarter to be much more severe – likely setting a new record low for contraction of economic activity in the country. Some experts are forecasting a decline of over 20 percent between the months of April and June, mostly due to delayed effects of business closures.