Impact of ongoing recession visible in Japan, lost title of world's third economy

Japan's economy was the third biggest in the world. Germany currently holds this title. Japan's economy dropped from third to fourth place. Japan's economy contracted in the third quarter of the current fiscal year. Japan may experience a recession as a result of this downturn.

Japan's economy has seen a decline on a quarter-to-quarter basis. This means that technically Japan is in recession.

Japan's Cabinet Office said that the country's domestic product declined by 0.4 per cent in October-December. Even in the previous quarter, it had fallen by 3.3 per cent. According to the report, spending by both households and businesses has been cut for the third consecutive quarter.

According to Bloomberg Economist, the contraction in domestic production in the fourth quarter has put Japan in the grip of a recession. In such a situation, it is doubtful that the Bank of Japan will soon follow the signals sent in January. This signals a retreat from the current policy.

Compared to the previous year, Japan's GDP shrank by 0.4 per cent in the fourth quarter. Additionally, the economy has shrunk by 0.1 percent. In addition, private consumption in Japan fell by 0.2 per cent during the fourth quarter.

It is anticipated that the Bank of Japan will soon make a significant choice that will boost the Japanese economy.

Japan's economy was the second largest in the world up until the end of the 1960s. Japan fell from second to fourth place due to several intricate economic issues.