On Thursday, both Japan and the UK found themselves in recessions, joining Finland and Ireland, as they reported two consecutive negative quarters of gross domestic product (GDP), meeting the widely accepted definition of a recession.
The economic downturn in Japan is attributed to its declining population, which has shrunk for the 14th consecutive year, contracting by 800,000 in 2022 alone.
According to Paul Donovan, the chief economist at UBS Global Wealth Management, this demographic trend hampers Japan’s growth prospects as a smaller population results in decreased production and consumption.
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That limits the country’s ability to grow because it means “fewer people make and consume fewer things,” Donovan said.
Conversely, despite population and wage growth in the UK, a decline in consumer spending, a key driver of the economy, could not be averted. This economic scenario highlights the intricate factors influencing the global economic landscape.
Based on the data available from Trading Economics 2023, these nations have shown two negative GDP growth rates.
Here are 4 countries, According to Statisense that have entered a recession
Finland
In Q2 of 2023, Finland faced a 0.9% contraction, which persisted into the third quarter with an additional decline of 0.4%. The Finnish economy, renowned for its resilience and innovation, has been under pressure due to external factors.
The global economic slowdown and disruptions in international trade have adversely affected the nation’s export-oriented industries, especially in the technology sector.
Furthermore, the economic downturn in key trading partners has compounded Finland’s challenges, highlighting the urgency for strategic interventions to spur recovery.
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Ireland
Ireland, encountered significant setbacks in both the second and third quarters of 2023, experiencing contractions of 1.9% and 0.7%, respectively. The nation’s close ties to the European Union and its heavy reliance on exports, especially in the pharmaceuticals and technology sectors, have rendered it susceptible to the uncertainties of the global economy.
The impact of the COVID-19 pandemic and the intricate complexities surrounding Brexit have further compounded Ireland’s economic challenges.
Japan
Japan, the third-largest economy globally, faced a 0.8% contraction in the second quarter (Q2), followed by a more modest decline of 0.1% in the third quarter (Q3) of 2024.
The nation has long struggled with economic stagnation, which an aging population and persistent deflationary pressures have exacerbated. The decline in consumer spending and disruptions in global supply chains have significantly contributed to the current recessionary trend.
United Kingdom
The UK witnessed a 0.1% contraction in Q2 and a 0.3% decline in Q3, signalling an overall economic slowdown. Brexit-induced uncertainties, and populations, affecting trade agreements and market access, coupled with COVID-19 impacts, have disrupted businesses and investor confidence.
Key sectors like hospitality, tourism, and retail face significant challenges due to lockdowns and supply chain disruptions. The services sector, vital to the UK economy, has been particularly hard-hit by remote work and changing consumer behaviour.
Chisom Michael is a data analyst (audience engagement) and writer at BusinessDay, with diverse experience in the media industry. He holds a BSc in Industrial Physics from Imo State University and an MEng in Computer Science and Technology from Liaoning Univerisity of Technology China. He specialises in listicle writing, profiles and leveraging his skills in audience engagement analysis and data-driven insights to create compelling content that resonates with readers.
