Signs of Economic Recovery - Japan
- With the coronavirus hitting Japan and
numbers going up every day, any economic recovery in the country seems unlikely, at least for the next few days. The details about the current situation of the virus, the economy, and the role of the government in the entire situation have been outlined below.
- As per the latest update, the coronavirus death toll reached 49 on Sunday, March 22 after 5 more people died from the virus that day.
- Additionally, 46 new cases were also diagnosed on the same day. This rate, on average, is about the same as it has been for the past few days, which suggests that the virus has not slowed down in the country.
- The Japanese Prime Minister, Shinzo Abe, who has been insisting that the 2020 Tokyo Olympics will be held as per the original schedule, hinted for the first time that the Olympics may have to be postponed. This suggests that the epidemic has not shown signs of a slowdown and maybe getting even worse.
- The auto and retail sectors in Japan are hit by the coronavirus with key players in both sectors seeing a decline in sales.
- 4 major department stores in the country have seen a decline in sales during February, partially due to the decline in the number of foreign tourists amid the COVID-19 outbreak.
- The disruptions in
manufacturing supply chains might continue to show up in upcoming economic data.
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| Image of Hong Kong country (Hong Kong International Airport). |
- The travel sector in
Japan has received a major blow due to the plummeting numbers of Chinese tourists after the country's government banned international group travel. - The travel sector has also been impacted due to the Prime Minister's request to postpone or cancel large events, which resulted in the closure of tourist attractions.
- Reportedly, the numbers (of tourists to Japan) went down by about 58% during February.
- Japan is part of the G20 group, which is an alliance of 20 countries. In the wake of the coronavirus, members of the G20 vowed to closely monitor the virus and its impacts on their economies.
- The delay of the Olympics is already causing distress to some businesses in Japan and things may become very bleak if the Olympics are postponed.
- The companies that were hoping to earn large profits from the Olympics now fear for their future.
- Japan's government is planning a stimulus package worth ¥13 trillion ($119 billion) to ease the economic suffering caused by the coronavirus. If the private sector, as well as other spending, is also included, the package can go up to ¥25 trillion ($231 billion).
- The package will "fund improvements to medical facilities, ease the supply and demand of masks, promote working from home, and provide subsidies to working parents who must take leave because of closed schools." The package will focus on funding small and mid-sized businesses.
- Haruhiko Kuroda, governor
at Bank of Japan, said that the central bank "will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases."
- The only positive sign, if it can be considered as one, in terms of economic recovery in Japan is that businesses believe that it might take several months for them to recover from the impacts of the virus, however, they are ready for a long battle to regain their economic strength.
- In terms of recovery, "43 percent of firms said it would take several months for the virus impact on their business to be resolved, and another 22 percent saw no end to it for the foreseeable future, the poll showed, in a sign corporate Japan is bracing for a long battle with the virus."
Signs of Economic Recovery - South Korea
- South Korea seems to have taken control of their coronavirus situation proactively, however, economic indicators do not portray a praiseworthy picture of the country's economy. The details about the current situation of the virus, the economy, and the role of the government in the entire situation have been outlined below.
- South Korea seems to have "flattened the curve" and the number of new infection cases in the country has stabilized in recent days. The country made this possible through stringent measures such as quarantining people and mass testing.
- According to sources, Korea has been successful in not only flattening the
curve but the number of new cases seems to be going down. - According to the latest updates, the death toll in the country has reached 120 with the total number of cases now at 9,037.
- Although the number of new cases in South Korea has decreased and the spread of COVID-19 has indeed slowed down, the economic crisis seems to be getting worse.
- The financial markets have been reported to be crashing and KOSPI and KOSDAQ have even activated the 'circuit breaker' for the first time.
- Markets as well as businesses, especially smaller ones, are temporarily shutting down in the country to stop the spread of the virus and due to the absence of consumers in the markets.
- The virus has not only forced businesses to close
down but also dented consumer spending and exports are reducing. - Travel and tourism have also been badly hit by the coronavirus and there are no signs of recovery so far.
- According to predictions, if the spread of the virus does not increase again and the slowdown is there to stay, sectors that have been hit hard by the virus might be able to rebound. These sectors include "semiconductor, handset, cosmetics/retail (duty-free), bio, banking, securities, media (cinema), games
( small/mid-caps), auto parts, oil refining, shipbuilding, and transportation." - According to South Korean Deputy Prime Minister for economic
affairs Hong Nam-ki, the economic recovery in the coronavirus-hit South Korea, and the world, will take 2 years for the U-shaped recovery. - Retail, travel, finance as well as many other sectors
are showing a downward trend amid the coronavirus impact.
- The government has announced plans to support businesses that have been impacted by the outbreak of the coronavirus.
- The government has already spent $3.3 billion and plans to invest another $16 billion in emergency spending. It has also "pledged to push for another $5 billion in supplementary budget spending in March. The central bank, for its part, has expanded its special
loans program by $4.1 billion to boost liquidity.