Economics
Japan’s GDP Set for Biggest Hit Since 2014 Ahead of Virus
- Analysts estimate a 3.8% contraction on typhoon, tax impact
- Clobbered economy now facing further punch from coronavirus
People wearing face masks ride escalators in Tokyo on Feb. 13.
Photographer: Tomohiro Ohsumi/Getty Images
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Japan’s economy likely suffered its biggest contraction since 2014 at the end of last year leaving it in a vulnerable state, as fallout from China’s viral outbreak threatens to turn a one-quarter-slump into a recession.
A sharp drop in consumer spending after a sales tax hike is seen as the main culprit behind an annualized 3.8% contraction estimated by economists. The slide would be the worst for Japan since the second quarter of 2014, when a previous tax increase prompted the economy to shrink by 7.4%.