Japan is known for having a developed economy. From the 1960s to 2010, Japan’s economy was known to be the second largest in the world. The GDP in 2016 was around USD 4.7 Trillion. Not only that, the per capita ranges about $43,236. However Japan is now the third largest economy worldwide. There is no surprise Japan will recover quickly. Diving deep into the crisis of COVID-19, let’s first take a look at how the economy was like before COVID-19, during, and the current economy in Japan.
Japan’s economy before COVID-19 was filled with many ups and downs. The start of economic growth began in the late 1950s to 1970s. An expansion for demand, production, and consumption lead to increase in income. For Japan’s post war development, they developed a plan for the next 5 to 10 years called the ‘Economic Self-Reliance Five Year Plan.’ It was regarded as the most successful plan in history. Since Japan is a free market, there is a focus on indicative types which rely on suggestives between the government and the public such as household sectors and business. Sommer, M. (2009). Within building development strategies, there have been about 14 economic plans.
Unfortunately during COVID-19, Japan is in deep distress which will take a while for recovery to follow through. Many lives have passed away with an average of 2,100 deaths in late 2020. Spending raised up for personal use, dining out, and much more and as a result this leaves a concern for the economy.In the first quarter, about 1.5% declined in private consumption. The macroeconomy, labor market, and consumption leads to heterogeneous effects on such activities.
Furthermore, the economy did assist the community with COVID-19 stimulus payments. Consumption behavior is highly significant which is why Japan collects data from softwares for specific payments. This is called the marginal propensity to consume Iwamoto, Y. (2021).
Japan is luckily in shape for exceptional economic growth, but this may take a while to do so. The economy minister Yasutoshi Nishimari believes GDP has the potential to recover (Kihara L., & Kajimoto T, 2021). Japan would have never had a lockdown, however it was necessary as death rates increased to 11,500. While many individuals are working from home and social distancing, the GDP dropped tremendously. It hasn’t been terrible since World War II. In addition, by April the previous quarter shrunk by 8.1%. Trade during the economy is recovering slowly, but the country is in deep demand for domestic trade as it can help elevate the economy.
Page Author: Daisy Magdaleno
