Japan's first-quarter GDP shrinks less than initial estimate
08 June, 2020
Japan’s economy shrank significantly less than initially estimated in the first quarter however the broad impact from the coronavirus crisis is still expected to send the united states deeper into recession.
A series of recent April data including exports, factory output and jobs figures suggested Japan is facing its worst postwar slump in today's quarter as the outbreak forced persons to stay in the home and businesses to close globally.
The world’s third-largest economy shrank an annualised 2.2 percent in January-March, revised data showed on Monday, less than the 3.4 percent contraction indicated in a preliminary reading and compared with a median market forecast of a 2.1 percent drop.
The revised data confirmed Japan had slipped into recession for the first time in 4-1/2 years, after a 7.2 percent contraction in October-December, pressured by last year’s sales tax hike and the US-China trade war. Recessions are defined as two straight quarters of contraction.
On quarter-on-quarter basis, the economy contracted 0.6 percent in the first quarter weighed against a short reading of a 0.9 percent decline.
Business spending showed gains following the finance ministry’s survey earlier this month, that was used to calculate the revised gross domestic product, drew fewer respondents than usual. Spending is likely to falter in coming months.
Capital spending rose 1.9 percent from the prior quarter, reversing from a preliminary 0.5 percent fall.
Private consumption, which makes up about more than half of Japan’s economy, fell 0.8 percent weighed against the preliminary 0.7 percent decline, as solid demand for daily necessities was offset by declines in shelling out for services.
Net exports - or exports minus imports - subtracted 0.2 percentage point from revised GDP growth, as the coronavirus slammed global demand.
Analysts are forecasting the economy are affected an annualised contraction greater than 20 percent in April-June as Prime Minister Shinzo Abe announced a state of emergency and requested citizens to remain home and businesses to near avoid the virus spreading.
Although the emergency was lifted in late May, the economy is likely to recover only moderately in coming months due to the pandemic’s sweeping impact globally and in the home.
THE LENDER of Japan is likely to maintain this month its projection that the economy will gradually get over the damage in the latter half of this year, sources said.
The BOJ eased monetary policy for just two straight months in April, joining government efforts to cushion the blow from the pandemic. The government has compiled two stimulus packages worth a combined US$2.2 trillion.
Source: www.thejakartapost.com