Japan Economy Logs Record Fall In Q2
17 August 2020 - 7:29PM
RTTF2
Japan's economy contracted at the fastest pace on record in the
second quarter due to the restrictions imposed to rein in the
spread of the coronavirus, official data showed Monday. Gross
domestic product contracted 7.8 percent in the second quarter,
which was the third consecutive decline, preliminary data from the
Cabinet Office revealed. This was also bigger than economists'
forecast of 7.6 percent fall and first quarter's 0.6 percent
decrease.
On an annualized basis, GDP declined 27.8 percent versus an
expected fall of 27.2 percent. Output contracted the most since the
records began in 1955.
The record annualized contraction was largely driven by a 30.1
percent fall in household spending and a 56 percent decrease in
exports. Government spending declined only 1 percent.
At the same time, business investment dropped 5.8 percent in the
second quarter.
Japan's economy will recover more rapidly than many other large
advanced economies, Marcel Thieliant, an economist at Capital
Economics, said.
That reflects its strong corporate balance sheets, generous
credit guarantee scheme and low reliance on tourism, the economist
added.
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