Asian economic power, which was severely affected by the corona pandemic, is growing again for the first time by three-quarters. But a renewed surge in new infections at home and abroad continues to worry Japan.
Tokyo (AP) – Japan’s economy is recovering from the record slump in the wake of the Corona crisis. It is the first time in three quarters that Japan’s economy is growing again after economic power entered a severe recession.
The gross domestic product (GDP) of the world’s third-largest economy, ahead of Germany, increased in the third quarter of this year, projected for the year, by 21.4 percent, as announced by the Tokyo government on Monday preliminarily. Economists expected Japan’s economic engine to kick up again after this recession. The increase in GDP, the strongest in four decades, was even more pronounced than many experts thought.
Tokyo’s main Asian stock exchange grew significantly in response to strong GDP figures. The Nikkei Index of 225 leading stocks rose 521.06 points, or 2.05 percent, and ended up trading at 25,906.93 points, its highest level in some 29 years.
Japan had already been severely weakened before the outbreak of the crown pandemic as a result of the trade conflict between the world’s two largest economies – the United States and China. Added to this are the consequences of an increase in VAT last year. Then came the crisis of the crown; restrictions imposed between April and the end of May hit the weak economy hard. However, since Japan, unlike other countries, did not impose a strict lockdown, the economic depression was still relatively mild.
Compared to the previous three months, Japan’s economy grew 5.0 percent in the third quarter. Private consumption, which contributes about 60 percent to economic output in Japan, increased 4.7 percent during the year and 7.0 percent compared to the previous quarter. However, corporate capital expenditures fell 3.4 percent, according to preliminary data.
Many economists in Japan expect the economy to continue to recover in the last quarter, but much more slowly than in the third quarter. A renewed increase in corona infection cases both abroad and at home is clouding business prospects. Experts in Tokyo also hope that it will be years before Japan’s economy fully recovers from the effects of the global pandemic.