Even before this coronavirus outbreak, the global economy was really starting to slow down. Economic numbers were absolutely dismal all over the world, and many experts were warning that we were right on the verge of the next global recession.
Now that this outbreak has erupted, we definitely have much more momentum in a downward direction. Very challenging times are ahead, although most people still don’t understand what is happening.
We are moving into a time when everything that can be shaken will be shaken. The global financial system is on the precipice of utter disaster, we we witnessing great civil unrest and political shaking all over the world, the drumbeat of war grows louder and louder, weather patterns are going absolutely crazy and seismic activity is on the rise all over the planet. For born again, Bible believing saints, as events unfold exactly as predicted in God’s Word, it is confirmation that our Heavenly Father’s plan for Jesus to return and rule and reign on this planet for 1000 years is on track and not too far distant. Saints are you preparing to rule and reign with Jesus in the Millennium?
Japan’s biggest contraction in more than five years adds to escalating concerns among policymakers about the length of a likely recession in the world’s third-largest economy as the impact of the coronavirus and a plunge in oil prices causes markets to slide and the yen to gain.
Japan’s gross domestic product was already contracting badly in 2019. It had shrank at an annualised pace of 6.3 percent from the previous quarter in the three months through December, 2019. Economists surveyed had predicted a fall of 3.8 percent, flagging the adverse impact of a sales tax increase, weak global demand and typhoon disruption.
Consumer spending fell 11.1% after the national sales tax was raised in October to 10% from 8%. During the same month,Typhoon Hagibis ravaged a large swathe of the country.
Capital spending declined 14.1% and exports slipped 0.4% due to the fallout from the U.S.-China trade war.
“I’m getting ready for another contraction in Japan’s first quarter. There just aren’t any positive factors to build a positive growth forecast,” said Mari Iwashita, chief market economist at Daiwa Securities Co., flagging her view that the economy is likely falling into recession.
“There is a good chance of Japan’s economy falling into a recession,” Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute, said before Monday’s data was released. He flagged the risks of supply chains being affected if the outbreak was prolonged.
The coronavirus is taking a toll on the number of Chinese tourists to Japan and manufacturing activity due to the economy’s close ties with China, prompting some economists to forecast a contraction lasting two quarters.
The following is how Zero Hedge summarised the recent economic data that we have seen come out of China…
While not perfect, and certainly not a comprehensive view of what is really taking place “on the ground”, the above data is a useful real-time indicator of how the people in China perceive the threat of the coronavirus pandemic, and one thing is abundantly clear: as the pandemic spreads further without containment, and as the charts above flatline, so will China’s economy, which means that while Goldman’s draconian view of what happens to Q1 GDP is spot on, the expectation for a V-shaped recovery in Q2 and onward will vaporise faster than a vial of ultra-biohazardaous viruses in a Wuhan virology lab.
As far as the coronavirus is concerned, the key will be what happens to the number of confirmed cases outside of China. Over the past week that number has roughly doubled, and if that keeps happening every week we will soon have a full-blown global pandemic on our hands.