Tokyo (AFP)
Japan's second quarter GDP collapsed 7.8% from the previous quarter under the impact of the coronavirus pandemic, a historic plunge marking a third straight quarter of contraction for the world's third largest economy .
This 7.8% drop, according to preliminary data released Monday by the government, follows declines in the first quarter (-0.6%) and fourth quarter 2019 (-1.9%), which had marked the entry into recession of the country.
This is Japan's first recession since 2015, defined by a contraction in national wealth over at least two consecutive quarters.
It is also the sharpest drop in GDP in the country since comparable data was put in place in 1980.
The consensus of economists polled by the Bloomberg agency expected a slightly smaller decline (-7.5%).
- Japan less affected than Europe and the United States -
The economy of the Archipelago, already in bad shape since the last quarter of 2019 due to a VAT hike in October, suffered the impact of the coronavirus from the first quarter of 2020.
In the second quarter, business suffered even more as a state of emergency was put in place in the country in April and May. Household consumption fell 8.6% over one quarter, and business investment fell 0.2% (land) and 1.5% (non-land).
Foreign trade was also at half-mast, with an 18.5% contraction in exports and a 0.5% drop in imports (-5.4% and -4.2% respectively in the first quarter).
Public investment, which had declined in the first quarter, however rose 1.2% in April-June.
With some 54,000 recorded cases and a thousand deaths linked to the Covid-19 disease, Japan has been less affected than many European and American countries, whose economies have been affected.
The impact of the Japanese state of emergency, calling for the voluntary cooperation of citizens and businesses and without penalties, was also less than in other industrialized countries.
In the second quarter, the euro zone thus suffered a decline of 12.1% of its GDP, weighed down by the even greater plunges of the French, Italian and Spanish economies.
- "Modest" takeover -
Despite the rise in the number of new daily cases of infection since the beginning of July, the Japanese government has regularly expressed its reluctance to launch new calls for containment, fearing their negative effect on the economy.
The decline in GDP in the second quarter is mainly to be attributed to the state of emergency in April and May, and the figures show an improvement from the month of June, commented Yoshiki Shinke, economist at the Institute of research Dai-ichi Life, in a note.
"The figures for July-September should start to rise, after the lifting of the national state of emergency," said Naoya Oshikubo, economist of SuMi Trust, in a note before Monday's publication. He anticipates a rebound of 2.6% for the third quarter compared to the second.
To cushion the economic shock of the pandemic, the Japanese government set up two stimulus plans of historic magnitude in the spring, including a flat-rate premium of 100,000 yen (about 800 euros) for each resident of the country. This premium should encourage consumption during the summer, said Naoya Oshikubo.
But while the number of new daily coronavirus cases remains high, the recovery is expected to be "modest". "We think that it will be necessary to wait until 2022 for the GDP to find its levels" before the coronavirus, moderates the analyst.
The recovery of the economy is also expected to be hampered by weakened demand affecting Japanese exports to countries hit hard by the pandemic.
© 2020 AFP