Last quarter’s contraction was worse than expected, but remains particularly less severe than the declines seen in many other trading economies.
However, this is the worst economic contraction for Japan since comparable knowledge was made in 1980, overshadowing the brutal effect of the 2008 global currency crisis.
And some analysts have rated it as the worst decline since knowledge compilation began in 1955, a replacement in calculation strategies in 1980 complicates comparison.
This was the third consecutive quarter of negative growth, confirming the deepening recession in Japan and increasing the chance of the government further reviving the economy.
“The fall of the Japanese economy in April and May a state of emergency exceeded expectations. Record drops are expected in the internal and external call,” Yoshiki Shinke, a leading economist at the Daiichi Life Research Institute, wrote in a note to the official. dissemination of data.
The economy contracted at an annualized rate of 27.8%, with domestic demand falling to 4.8% and exports of goods to 18.5%.
But imports fell 0.5%, higher than the 4.2% decline seen between January and March.
From the following year to March 2020, Japan’s genuine GDP remained at 0.0%, with an expansion of 0.3% in fiscal year 2018, the Cabinet Office said.
Japan was already grappling with a stagnant economy and the effect of an accumulation in the entry tax implemented last year before it hit the pandemic.
It has experienced a smaller coronavirus epidemic in some of the most affected countries, with infections reaching 55,000 and deaths to just under 1100.
A national state of emergency was imposed as higher instances in April, but the restrictions were much more flexible than in many countries, without an enforcement mechanism for closing businesses or keeping others at home.
The emergency was lifted in June and the government has been reluctant to reintroduce measures, even though infections are expanding again.
Some recovery was observed in Japan after the government lifted the state of emergency, but that is not enough to compensate for the severe falls felt in April and May, Shinke said.
The contraction in April-June compared to the market’s expectation of a contraction of 7.6%, the average forecast of the top economists surveyed through the Nikkei business.
The figure is less severe than quarterly falls in some other primary economies, particularly the United States, which contracted 9.5 percent, and Germany with a drop of 10.1% for the same quarter.
Japan has imposed more restrictions on coronavirus and has its own larger than its trading peers, said Naoya Oshikubo, senior economist at SuMi Trust.
“A collapse of the non-public intake Array … will be the main thing in the weakness of domestic demand. Personal intake was especially low in April-May when the national state of emergency was in force in Japan,” he wrote before the knowledge was made public.
“Capital investment has also been affected by the COVID-19 pandemic, as uncertainty has forced corporations into their investment plans,” Oshikubo said.
Despite the numbers, analysts said the economy might be waiting for an uptick, with Oshikubo projecting a 2.6 expansion for the July-September quarter.
“The recovery will be driven through an emerging internal and external call, in addition to normalization in Western countries, as the blocking measures of many countries will be lifted,” Oshikubo said.
Personal consumption, which fell by 8.2 percent in the April-June quarter, is expected to gain benefits from a government stimulus payment of 100,000 yen ($939) to all Japanese residents, he said.