Japan’s GDP Shrinks by an Annualized 27.8% in Second Quarter of 2020
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Preliminary figures released by Japan’s Cabinet Office on August 17 for seasonally adjusted GDP show a 7.8% decrease compared to the previous quarter (excluding the effect of price changes), which represents an annualized drop of 27.8%. This is the largest postwar decrease, exceeding the 17.8% fall during the January to March quarter of 2009, due to the global economic crisis. It comes after economic activity came grinding to a temporary halt during the state of emergency declared in response to the COVID-19 crisis, and marks the third consecutive quarterly decrease.
Personal consumption, which makes up nearly 60% of Japan’s GDP, was down by 8.2% for the same quarter. Social distancing during the state of emergency in April and May dealt a serious blow to consumption in the service sector, including restaurants and travel-related businesses. Overseas demand for Japanese goods also fell amid the global pandemic as cities in the Europe and North America faced lockdown. Exports fell by 18.5% compared to the previous quarter, for a 56.0% annualized drop. The de-facto closing off of Japan from the world, which caused a steep drop in consumption from foreign visitors, also harmed service exports within the country’s GDP.
Preliminary GDP Results for April–June 2020
| April–June 2020 | January–March 2020 | |
|---|---|---|
| GDP | -7.8% | -0.6% |
| Annualized GDP | -27.8% | -2.5% |
| Personal consumption | -8.2% | -0.8% |
| Housing investment | -0.2% | -4.2% |
| Capital investment | -1.5% | 1.7% |
| Public investment | 1.2% | -0.5% |
| Exports | -18.5% | -5.4% |
| Imports | -0.5% | -4.2% |
Created by Nippon.com based on data from the Cabinet Office.
(Translated from Japanese. Banner photo: Tokyo Metropolitan Government Building lit up in red on June 7, 2020, during the COVID-19 alert declared in Tokyo. © Pixta.)