Pandemic is expected to contract Japan's economy at the fastest rate of several decades, Reuters estimates

"It would take two or three years for economic activity to return to normal levels in Japan, while international markets are expected to continue to suffer from the spread of the virus," says Atsushi Takeda, chief economist at the Itochu Research Institute.

Japan's economy is expected to shrink at the fastest rate for decades, until March next year, forcing the Japanese government to create a new stimulus package to cushion the coronavirus pandemic coup, estimates Reuters on Friday. July 10, after a poll.

Many of the respondents admitted that the Bank of Japan's next step would be to expand the stimulus to a higher value, even though they do not see the crisis that the pandemic has already started to cause in the banking sector. Forecasts show that the Japanese economy contracts 5,3% this year, data that refer to 1994, but that next year it should recover 3,3%.

Still, the “Reuters” survey indicates that the economy will grow at an annualized rate of 10% in the third quarter, after a 23,9% contraction in the second quarter of 2020, which ended in June. "It would take two or three years for economic activity to return to normal levels in Japan, while international markets are expected to continue to suffer from the spread of the virus," says Atsushi Takeda, chief economist at the Itochu Research Institute.

To date, Japan has approved a $ 2,2 billion (1,9 billion euro) stimulus, but economists polled by "Reuters" expect Japan to present a new stimulus later this year to ease the impact on business. and household savings.

Of the 40 economists consulted by “Reuters”, 26 expect the Bank of Japan to expand the economic stimulus, with 18 maintaining that this increase should happen this year and five predicting that the new stimulus will only be presented next year.

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