Japan’s GDP lost 7% in the IV quarter

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Japan’s GDP lost 7% in the IV quarter
March 14
10:00 2020

Financial indicators of Japan for the fourth quarter of last year have been made public. The country’s GDP has fallen 7%. This is the biggest drop in the last 5.5 years. An increased consumption tax caused the decline. According to preliminary estimates, the decline in GDP was supposed to be 6.3%.

There was such a decline in the gross product in the III quarter of 2018.

Experts predicted that the indicators would be revised to 6.6%. In the III quarter of 2019, GDP grew only 0.1%.

According to analysts, a decrease in GDP can be observed in Japan during the period from January to March of the current year due to the coronavirus epidemic. If the indicator declines two quarters in a row, then we can talk about a technical recession.

Between October and December, the country’s GDP fell by almost 1.8% compared with the previous quarter. This is the largest figure since the second quarter of 2014.

The expenditures of the population in October-December fell almost 3%. The consumption tax (local VAT), which increased from 8% to 10%, was the reason for the drop. Experts also consider a warm winter season to be a reason for lower consumer spending.

Business investment has fallen 4.5%. This has happened for the first time in three quarters. The trade war between China and the United States caused the drop.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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