COVID-19 Impact: Japan, Singapore economies hardest-hit in the Asia-Pacific region

Worldwide lockdowns and the battle against the COVID-19 pandemic has led to a global economic downturn. Amid the economic damages across several countries, the Japanese and Singaporean economies could be the most hit in Asia-Pacific, according to Moody’s Analytics. In an interview with international media, Moody’s Analytics chief Asia Pacific economic Steve Cochrane stated that the economies of both the countries were already weak before the pandemic outbreak. Now, in the aftermath of lockdown measures, the economic troubles for Japan and Singapore have intensified over the past weeks.

In March 2020, Moody’s had predicted no growth in Japan and Singapore in the latter half of the year. Moody’s Investors Services had revised its forecasts for the economies of Asia Pacific countries in the wake of Coronavirus lockdown measures. In its latest report titled Global Marco Outlook 2020-21, Moody’s has projected Japan’s economy to contract by 6.5%. It added that the economic costs of the shutdown of the global economy are accumulating swiftly.

Notably, Japan has been in recession since the fourth quarter of 2019 in the aftermath of the October hike of its value-added tax. Additionally, Singapore’s growth rate in the fourth quarter of 2019 was nearly zero, which declined further in the first quarter of 2020.

Recently, Singapore announced that its unemployment rate rose to the highest reading since September 2009 at 2.4% in March 2020 from 2.3% in December 2019. Japan’s jobless rate in March also rose to its highest in a year at 2.5%.

The International Monetary Fund (IMF) also projected Singapore’s GDP to come in at minus 3.5% this year. However, it suggested that Singapore can rebound by the next year with a 3% growth rate. Moreover, Japan’s real GDP is expected to decline by 5.2 percent. As per the IMF, economic growth in the entire Asia-Pacific region is likely to come down to a standstill in 2020 for the first time in 60 years. Adding to their crisis, both Japan and Singapore are grappling with new waves of Coronavirus infections.

World economies are certainly suffering the hammer of the pandemic with millions of job losses and closure of businesses due to unprecedented restrictions. The International Labor Organization has also estimated that approximately 7.2% of the working hours will be wiped out across the Asia-Pacific region in the second quarter of 2020, which is equivalent to 125 million full-time jobs.

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