On Monday, Japan's government data released showed that its economy shrank at an annualized rate of 27.8 percent in the April-June period when compared to the previous quarter, its sharpest contraction ever, due to restrictions imposed amid the coronavirus pandemic.
While the contraction was smaller than a 32.9 percent decrease in the US, it was much bigger than a 17.8 percent fall Japan suffered in the first quarter of 2009, during the global financial crisis. The size of Japan's real GDP shrank to 485 trillion yen, the lowest since April-June 2011 when Japan was still suffering from two decades of deflation and economic stagnation.
The preliminary GDP data for April-June 2020 also marks negative growth for the third consecutive quarter.
Even before the pandemic, the Japanese economy had been affected by the US-China trade conflict and a consumption tax hike last year. Damage to the economy has deepened after its government declared a state of emergency in April due to COVID-19.
Private consumption, which accounts for more than half of the economy, sank 8.2 percent from the previous quarter, with spending on trips, eating out and shopping significantly cut amid stay-at-home requests, a government official was quoted saying in The Japan Times
Exports of goods and services, including spending by foreign tourists, slipped 18.5 percent.