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Japan's Economy Just Imploded

Country suffers worst contraction on record—27.8%
By Newser Editors and Wire Services
Posted Aug 17, 2020 12:52 AM CDT

(Newser) – Japan’s economy shrank at an annual rate of 27.8% in April-June, the worst contraction on record, as the coronavirus pandemic slammed consumption and trade, according to government data released Monday. The Cabinet Office reported that Japan’s preliminary seasonally adjusted real gross domestic product, or GDP, the sum of a nation’s goods and services, fell 7.8% quarter on quarter, the AP reports. The annual rate shows what the number would have been if continued for a year. Japanese media reported the latest drop was the worst since World War II. But the Cabinet Office said comparable records began in 1980. The previous worst contraction was in the first quarter of 2009, during the global financial crisis.

The world’s third largest economy was already limping along when the virus outbreak struck in China late last year. It has weakened as the pandemic gained ground; per the New York Times, it has now declined for three consecutive quarters. It shrank by 1.8% in the fourth quarter of 2019 and 0.6% in the first quarter of 2020, thus entering a recession—the first major nation to do so after the pandemic hit. “These are tough numbers but they bottomed out in April and May, we would like to put all our efforts into returning to a growth trajectory," said Yasutoshi Nishimura, minister of Economic and Fiscal Policy. By comparison, the US economy contracted at a rate of nearly 33% in the last quarter, while that in the UK skidded 20.4%.

(Read more Japan stories.)

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