Japan Suffers Its Worst GDP Drop On Record

What Happened:

• Japan just reported its worst GDP drop on record shrinking 7.8% in the second quarter. This is Japan's third consecutive quarter of contraction and the worst rate of decline since modern records started being maintained in 1980.

• Japan is the world's third largest economy behind the USA and China. The Covid-19 pandemic and a consequent decrease in consumer spending is blamed for the drop.

• Despite the drop, Japan performed better than other major economies in the April-June period. The United States and Germany both had 10% falls, the UK had a 20.4% fall plunging it into a recession and Canada has said the expect a contraction of 12% from the previous quarter.

• China, the world's second largest economy, had a return to growth in the second quarter allowing it to avoid a recession.

• Despite a rebound in activity in June and July, many economists have expressed concern about the pace of the recovery.

Photo Credit: Sofia Terzoni