Japan's economy shrinks at record rate, slammed by pandemic

Japan’s ecomy shrank at annual rate of 27.8% in April-June, worst contraction on record, as coronavirus pandemic slammed consumption and tre, according to government data released Monday. Cabinet Office reported that Japan’s preliminary seasonally justed real gross domestic product, or GDP, sum of a nation’s goods and services, fell 7.8% quarter on quarter. annual rate shows what number would have been if continued for a year.

Japanese media reported latest drop was worst since World War II. But Cabinet Office said comparable records began in 1980. previous worst contraction was during global financial crisis of 2008-2009. world’s third largest ecomy was alrey ailing when virus outbreak struck late last year. fallout has since grually worsened both in COVID-19 cases and social distancing restrictions.

ecomy shrank 0.6% in January-March period, and contracted 1.8% in October-vember period last year, meaning that Japan slipped into recession in first quarter of this year. Recession is generally defined as two consecutive quarters of contraction. Japanese ecomic growth was flat in July-September. Growth was modest in quarter before that.

For April-June period, Japan's exports dropped at a whopping annual rate of 56%, while private consumption dipped at an annual rate of nearly 29%. That was without any full shutdown of businesses to contain coronavirus outbreaks, which have worsened in past month, pushing total number of confirmed cases to over 56,000.

Analysts say ecomy is expected to recover grually, once impact of pandemic is curbed. Japan's export-dependent ecomy relies heavily on growth in China, where outbreaks of vel coronavirus began and have since subsided. But demand has remained subdued.

Development of a vaccine or medical treatment for COVID-19 would also help, but prospects for such breakthroughs are unclear. Since GDP measures what ecomy did compared to previous quarter, such a deep contraction will likely be followed by a rebound, unless conditions deteriorate furr.

That doesn’t necessarily mean ecomy will return to pre-pandemic levels. Some experts doubt air travel and or sectors will ever fully recover. On or hand, some companies have reaped rewards of people staying at home, such as Japanese video-game maker Nintendo Co., whose recent profits have boomed.