Most Economists See Virus Pushing Japan Into Recession: Survey
Most Economists See Virus Pushing Japan Into Recession: Survey
(Bloomberg) -- Japan is falling into recession as the coronavirus pummels an economy already weakened by a sales tax hike, according to a Bloomberg survey.
Nine out of 14 polled economists see the economy shrinking again in the three months to the end of March, following the sharpest contraction in more than five years last quarter. The median forecast of analysts shows gross domestic product declining at an annualized pace of 0.25% this quarter.
The growing likelihood of a recession could put pressure on Prime Minister Shinzo Abe’s administration to consider yet more extra spending to support the economy, just a couple of months after the government announced a stimulus package to support growth.
Economists now see the virus preventing a rebound this quarter and keeping the economy in reverse. The immediate impact of the epidemic has been to stop hundreds of thousands of Chinese visitors to Japan, the biggest source of tourist income.
The outbreak could also further curtail dismal spending by Japanese consumers, as they avoid crowded places after reports of some infections in Japan’s biggest cities.
Japan’s exporters, already suffering after a long stretch of weak global demand, could be hit even harder, as the outbreak disrupts production and domestic demand in China, Japan’s biggest trading partner. The longer the outbreak continues, the more likely some parts supplies from China for Japanese manufacturers may also dry up.
To contact the reporters on this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net;Cynthia Li in Hong Kong at cli205@bloomberg.net
To contact the editors responsible for this story: Malcolm Scott at mscott23@bloomberg.net, Paul Jackson, Jason Clenfield
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