There’s more at stake in Tokyo’s prospective emergency measures to contain the coronavirus than the fate of the metropolis’s great bars and restaurants. Bullish scenarios for a muscular global economic rebound may have to be reassessed.
The International Monetary Fund has penciled in world growth of 5.2%, and a 6.9% boost for Asia. Morgan Stanley predicted a global gain of 6.4%. But Japan may be heading for a renewed contraction after Prime Minister Yoshihide Suga declared a state of emergency in the capital and surrounding districts. The steps may slice 0.7% from gross domestic product each month they are in force, according to Bloomberg Economics.
It’s not a leap to see Japan return to recession. Growth lost altitude toward the end of last year; retail sales plummeted in November and Tokyo consumer prices slid the most in a decade.