Japan’s economy has contracted at the fastest rate in five years at the end of 2019. The major reason behind the contraction is a rise in sales tax, a major typhoon and weak global demand. The sales tax was raised to 10 percent from 8 percent in October which led to the fall in consumer spending by 2.9 percent. Likewise, in the same month, Typhoon Hagibis hit the large parts of the country.
As reported, the GDP has fallen at a steeper rate than expected 6.3 percent in the last quarter of 2019. And the worst part is due to the coronavirus outbreak, the economy is expected to further weaken in this quarter too. It is also being feared that the economy may fall into recession. As of now, Japan is the world’s third-biggest economy.
The economy was also hit by the trade war between the US and China as capital spending fell by 3.7 percent and export also lost 0.1 percent last quarter.