Japan Crawled Out Of Recession Gap, Its Economy Skyrocketed 21.4 Percent

Illustration. (Photo: Unsplash)

JAKARTA - The Japanese economy was able to skyrocket and grow 21.4 percent annually in the third quarter of 2020. The economy of Sakura Country managed to rebound sharply from a record slump after the downturn caused by the COVID-19 pandemic.

Quoted from Reuters, Monday, November 16, even though the economy is growing significantly, many analysts still expect the rebound to be restrained because Japanese people's consumption is still weak. The threat of COVID-19 from within and outside the country can still cloud the prospects for economic recovery at any time.

The expansion of the gross domestic product (GDP) was able to grow 18.9 percent. This marks the first increase in four quarters and follows a 28.8 percent decline in April-June.

Meanwhile, on a quarter-on-quarter basis, the Japanese economy grew 5.0 percent. That is faster than many predictions that the Japanese economy will only grow 4.4 percent after emerging from recession.

Private consumption, which affects more than half of the economy, increased 4.7 percent in July-September from the previous quarter. The growth also reflects a rebound from the April-June decline due to lockdown measures aimed at preventing the spread of the coronavirus.

External demand or exports minus imports added 2.9 percent points to GDP growth thanks to a rebound in foreign demand that pushed exports by 7.0 percent

Japan has so far announced two stimulus packages totaling $ 2.2 trillion to counter the effects of the health crisis, including cash transfers for households and small business loans.

Prime Minister Yoshihide Suga has instructed his cabinet to come up with another package as the damage to the pandemic continues.

Despite some signs of improvement in recent months, analysts expect Japan's economy to shrink 5.6 percent in the current fiscal year ending March 2021. It will take years to return to pre-COVID-19 levels.