US, WASHINGTON (ORDO NEWS) — The Japanese government on Thursday gave the darkest assessment of the state of the economy in nearly seven years, reporting that conditions in March were “difficult” due to closure of enterprises and weakening demand due to the coronavirus pandemic.
In a monthly report, the government abandoned the wording that characterized the economy as “recovering,” for the first time since July 2013.
A worsening outlook sets the stage for Japan to develop a stimulus package in April, which sources say will include spending of at least $ 137 billion to mitigate the impact of the virus.
“The Japanese economy is in a difficult situation, under extreme pressure from the coronavirus,” the report said.
“The conditions are likely to remain difficult due to the impact of the disease.”
The government also lowered its estimate of consumption, capital expenditures, and business sentiment — all of which have been affected by global travel bans, cancellations, and supply chain disruptions caused by the pandemic.
“The economy is deteriorating at a pace comparable to what was observed during the earthquake in March 2011, and to the levels that were last seen during the collapse of Lehman Brothers in 2008,” director of cabinet macroeconomic analysis Masahiko Tsutsumi told reporters at a briefing. “The damage is as great as those two events combined.”
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