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Japan Sees Its Biggest Ever GDP Contraction In Apr-June Amid COVID-19

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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.

Japan Sees Its Biggest Ever GDP Contraction In Apr-June Amid COVID-19
 

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.

Read more about: japan gdp
Story first published: Monday, August 17, 2020, 8:56 [IST]
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