Dear MEL Topic Readers,
Coronavirus: Japan suffers its biggest
economic slump on record
Japan’s economy had been struggling even
before the coronavirus pandemic. So, it is not surprising that the country’s
economy shrunk the largest in recent months. Indeed, Japan’s GDP declined by 27.8%
on an annual basis during the April-June quarter from the previous period.
Yes, there was a sales tax hike from 8% to
10% last year, which might have had some impact on the economy in the October-December
quarter. But the economy of the world’s third-largest GDP has been declining even
without the impacts of sales tax or the novel virus. Why? Most of the service, commodity,
real estate, property prices haven’t risen for some time except in downtown
Tokyo and some other prime locations but only in major cities like Osaka,
Yokohama, or Nagoya. As the population has been declining much faster than
predicted (or hoped), Japan's society is aging faster than most other countries. In
fact, the number of newborn babies last year was less than half of the
baby-boomers era. So, even when the pandemic ends, how much recovery or new
investment can be expected under the new norm?
Read the article and think about where Japan
will go after the pandemic.
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