According to the revised figures, the Japanese GDP is shrinking from quarter to quarter. On Tuesday morning, the final readings from the cabinet office revealed that the second quarter annualized Gross Domestic Production (GDP) of Japan was confirmed at -28.1 percent (from an estimation of -28.5 percent).
Covid-19 pandemic has forced businesses to shut down, people to stay at home, restaurants and transports to close, for almost six months since its global outbreak in mid-March. Not only national revenue generation has been affected but Covid-19 has also impacted the international profits coming from the travel and tourism industry.
Talking about Japan, it has the fourth biggest industrialized and free-market economy in the world. It holds the largest electronic industry and the 3rd largest automobile industry in the whole world. It is well-known for its efficient and competitive export-oriented business sectors. The sealing of international borders worldwide has badly impacted Japan’s export reliant economy.
In May, the government of Japan allowed the re-opening of local businesses. However, there was no high seen in domestic spending and wages (for June and July). On Tuesday, the Japanese economy shrank at an annualized rate of 28.1 percent (April-June) which accounted for this critical postwar decline. This sinking economy is creating an alarming situation for the new prime minister as well. The elections in Japan are due on September 14. No matter who will win but one thing is expected that he must be ready with the economic support plans.
In response to the GDP fall, Yoshihide Suga (contesting for the next leader of Japan) has assured the public with his preparedness to handle the crisis while increasing the spending and revenue generation sectors. Currently, Yoshihide Suga is the chief cabinet secretary. He is contesting from the Liberal Democratic Party. He is being actively challenged by Shigeru Ishiba (former defense minister) and Fumio Kishida (former foreign minister).
The current Japanese Prime Minister, Shinzo Abe is resigning due to his poor health conditions, and doesn’t want his illness to interfere with the nation’s future in the current critical conditions of the pandemic.