Japan has escaped recession, recovering from the sharpest economic plunge since the end of World War 2 due to the impact of the Covid-19 pandemic.
Reuters reported on Nov. 16 that Japan posted a growth rate of 5.0 per cent in the third quarter of 2020 (3Q2020), the first since the declines posted in the previous three quarters.
It was better than the expected growth rate of 4.4 per cent that was previously projected, on a quarter-on-quarter basis.
Private consumption, exports up
The growth was helped by a rise in private consumption, after a slump that was thought to be the result of Covid-19 restrictions.
External demand also rose after a growth in overseas demand, which in turn pushed up Japan's exports by 7.0 per cent.
However, capital expenditure fell by 3.4 per cent for a second straight quarter, suggesting that businesses are wary about expanding or investing in an uncertain economic climate.
New stimulus package coming soon
Japan has already passed two massive Covid-19 relief packages, with money in direct spending and support for businesses, totalling around US$2.18 trillion (S$2.93 trillion).
However, newly-minted Japanese Prime Minister Yoshihide Suga has directed his cabinet to come up with another stimulus package to mitigate the fallout from Covid-19.
CNBC quoted Economy Minister Yasutoshi Nishimura, who said that this package would include support for digitalisation and assisting structural changes in the economy.
Top image by Maasaki Komori via Unsplash.