Japan's economy continues to plunge due to pandemic

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Japan suffered, in the second quarter, a historic drop in its GDP of 7.8% - or 27.8% on an annualized basis - compared to the previous quarter. The coronavirus is causing a drop in household consumption, business investment and exports.

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From our correspondent in Tokyo ,  Frédéric Charles

The plunge marks a third consecutive quarter of contraction for the world's third-largest economy. No rapid improvement in the economy is expected, despite a stimulus plan hastily concocted by the government of Shinzo Abe.

All the growth accumulated since the Prime Minister took power eight years ago has evaporated in a few months, due to the coronavirus pandemic. 

An absence of structural reforms

This fall of 27% at an annualized rate, between April and June, was also announced when Shinzo Abe was admitted to a hospital in Tokyo. They say the head of government is exhausted. He suffers from chronic ulcerative colitis. The father of Abenomics , this growth strategy, emerged at the end of the day. According to the media, this is just a routine medical check-up.

This historic plunge in Japanese GDP precisely marks the limits of Abenomics. Shinzo Abe did not carry out structural reforms to allow Japan to face competition from China, especially in the digital sector. Deregulation is slow. The government still favors large groups to the detriment of start-ups.

Analysts believe that it will be necessary to wait until 2022 for Japanese GDP to return to pre-coronavirus levels.

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• Japan
• Economy
• Shinzo abe
• Coronavirus

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