Experts warn second recession in case of another lockdown in Japan

With a surge in coronavirus cases in the country, Japan’s government might have to impose another state of emergency, ka lockdown, for nearly two weeks.

However, some analysts have warned that the decision may push the country into another recession if the retailers are again asked to close their businesses.

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This has come especially as the country is about to step into the Golden Week holidays which will be starting from next week and will continue till early May. This holiday season usually is a huge business booster for the retailers and was being seen as a hope of bringing businesses back to life after continued lockdowns in the country, which had sent the economy into a downward spiral.

"The risk of a double-dip recession has clearly heightened," said Hiroshi Shiraishi, senior economist at BNP Paribas Securities. "The impact of imposing curbs on Tokyo and Osaka alone would be quite big."

If the government implements lockdown in four main regions of the country, it would affect nearly 30 per cent of the GDP of Japan as the regions house almost a quarter of the 126 million.

"We need to take stronger and more targeted steps than before including requests (for shops) to close," Economy Minister Yasutoshi Nishimura was quoted as saying by Kyodo news agency.

The lockdown and slow rollout of vaccines across the country are also raising doubts on whether the country will be able to and should be allowed to host Tokyo Olympics in July.

Japan will also be canceling the famous Tokyo Motor Show, Japan Automobile Manufacturers Association Chairman Akio Toyoda said, to ensure the participants are safe and do not get infected in the surge of cases