The greater the country is, the more challenging it is to tackle minor problems in the global economy. Japan has been experiencing such difficulties for a number of years, while COVID-19 has only exacerbated the situation.
The coronavirus pandemic inflicted severe damage on the economy of Japan which had been already fragile for the past several years. The world's third-largest economy shrank an annualised 27.8% in April-June, marking the steepest decline on record. On a quarter-on-quarter basis, its gross domestic product dropped by 7.8%. It was the third consecutive quarterly dip in GDP. Japan's economic contraction was mainly triggered by falling exports amid the global trade slump as well as by weak domestic demand holding back industrial production. Besides, the tax reform had little effect. Japan's export-oriented economy is very sensitive to global problems. Moreover, the COVID-19 epidemic is likely to implode the Japanese economy.
On the back of the alarming epidemiological situation, the country's authorities decided to give every citizen 100,000 yen ($930) as an additional step to mitigate its impact. All residents of Japan can apply for a bailout.
