TOKYO, May 18 (NNN-NHK) – Japan’s gross domestic product, in fiscal year 2020, shrank 4.6 percent in real terms, down for the second straight year, government statistics revealed today.
The figure logged the largest annual contraction on record, since data began to be compiled in fiscal 1955, according to the preliminary data, released by the Cabinet Office.
The previous record decrease was a 3.6-percent shrinkage in fiscal 2008, marked in the wake of the global financial crisis.
Meanwhile, government statistics showed the country’s economy in the Jan-Mar period contracted an annualised real 5.1 percent, compared to the previous quarter, the first shrinkage in three quarters, due to a second state of emergency over the COVID-19 pandemic.
The decrease in real GDP, the total value of goods and services produced in the country adjusted for inflation, corresponds to a 1.3-percent contraction on a seasonally adjusted quarterly basis, data showed.
The latest quarterly GDP contraction was worse than private-sector economists’ average projection of an annualised 4.61 percent shrinkage.
Amid a resurgence of COVID-19 infections since Nov, the government declared the second state of emergency in early Jan for the Tokyo metropolitan area. It was expanded to 11 out of Japan’s 47 prefectures within a week, before it was fully lifted in late March.
The emergency state, requiring people to stay at home and restaurants and bars to shorten opening hours, led to a sharp drop of 1.4 percent in private consumption.
After marking a record high GDP drop in 2020’s second quarter, due to the first state of emergency, from Apr to May, the economy rebounded strongly until the Oct-Dec quarter, with the gradual resumption of economic activities contributing to consumption and exports.
Looking ahead, some analysts predicted that Japan’s economy will continue to contract in the current Apr-June period, as a third state of emergency declared late last month was extended and expanded to cover Tokyo and eight prefectures, amid the spread of more contagious COVID variants, while the country is lagging behind in its vaccine rollout.– NNN-NHK
