Tokyo, Sept. 8 (Jiji Press)–A revised government report reconfirmed on Tuesday that Japan’s economy contracted at the fastest pace in the postwar period in April-June due to the fallout from the novel coronavirus epidemic.
The country’s seasonally adjusted gross domestic product in the first quarter of fiscal 2020 fell a real 7.9 pct from the preceding quarter, or 28.1 pct at an annual rate, the Cabinet Office said in the revised report. The figures were worse than the 7.8 pct and 27.8 pct drops, respectively, announced by the government agency in a preliminary report in August.
The revised annualized decrease, which came against a median forecast of a 28.6 pct decline in a Jiji Press survey of 18 private think tanks, outpaced the previous biggest postwar drop of 17.8 pct, marked in January-March 2009, after the September 2008 collapse of U.S. investment bank Lehman Brothers, which led to a global financial crisis.
The downward revisions came as corporate capital expenditures, which accounted for nearly 20 pct of the GDP, fell a revised 4.7 pct quarter on quarter in price-adjusted real terms, sharper than the preliminary reading of a 1.5 pct decrease.
The stagnation in economic activities blamed on the virus crisis caused a rapid decrease in investment appetite at both manufacturers and nonmanufacturers, analysts said.
Private consumption, accounting for more than half of the GDP, slumped a revised 7.9 pct, against the preliminary reading of an 8.2 pct fall, with leisure-related outlays posting a milder drop.
But the pace of the revised drop was still the biggest since comparable data became available in 1980, as the government’s coronavirus state of emergency, which was in place between April and May, heavily dampened consumption, including on dining out and travel.
Housing investment shrank a revised 0.5 pct, bigger than the drop of 0.2 pct in the preliminary report. Public-sector investment was up 1.1 pct, against the earlier reading of 1.2 pct growth.
Exports declined 18.5 pct, unchanged from the preliminary figure.
In nominal terms, Japan’s April-June GDP was down a revised 7.6 pct, for an annualized drop of 27.2 pct, against the earlier reported falls of 7.4 pct and 26.4 pct, respectively.
Private-sector economists expect the country’s GDP will grow at an annualized pace of over 10 pct in July-Septemper after the sharp contraction in April-June.
But some warmed that the recovery momentum could stall, with little sign of improvements seen in private consumption and corporate capital expenditures.
Still, economic and fiscal policy minister Yasutoshi Nishimura said at a news conference, “Consumption will regain steam if the current declining trend in new cases of coronavirus infection becomes clear,” stressing the government’s resolve to achieve an economic recovery led by private-sector demand.
“We’ll keep implementing necessary measures quickly while monitoring the situation,” Chief Cabinet Secretary Yoshihide Suga told a separate press conference, underlining the importance of ensuring that jobs are protected and business operations are continued.