Japan’s GDP shrank more than estimated in 2Q

by AFP

TOKYO • Japan’s economy shrank slightly more than initially thought in the April-June quarter, official data released yesterday showed, deepening a contraction that was already the worst in the nation’s modern history.

The world’s third-largest economy shrank 7.9% in the second quarter of this year from the previous quarter, more than the initial 7.8% in the preliminary data, the Cabinet Office said.

The downward revision comes with corporate investment weaker than in the preliminary data released last month, as the coronavirus deepens the country’s economic woes.

The latest headline figure was modestly better than market consensus of an 8% contraction, but it is the worst figure for Japan since comparable data became available in 1980, beyond the brutal impact of the 2008 global financial crisis.

Separate data released by the Internal Affairs Ministry yesterday showed Japan’s household spending in July dropped 7.6% year-on-year, also underlining the impact of the Covid-19 on the economy.

The 7.6% drop was the 10th consecutive monthly decline and comes after a 1.2% slide in June and 16.2% dive in May.

Japan’s economy was in recession even before the Covid-19 hit due to damage from a powerful typhoon last year, and a sales-tax hike in October. — AFP