Japan sees record economic slump, slammed by COVID pandemic

New Delhi (NVI): Japan’s economy shrank at annual rate of 27.8 per cent in April-June, the worst contraction on record, as the coronavirus pandemic slammed consumption and trade, according to the government data.

Gross Domestic Product (GDP) fell 7.8 per cent in the second quarter of 2020 compared with the previous quarter, the worst drop on record in the period since 1980, when comparable data began to be available.

The annual rate shows what the number would have been if continued for a year.

The previous worst contraction, a 17.8 per cent drop, was in the first quarter of 2009, during the global financial crisis.

The world’s third largest economy was already limping along when the virus outbreak struck in China late last year. It has weakened as the pandemic gained ground, leading to social distancing restrictions and prompting many people to stay home when they can.

The size of Japan’s real GDP shrank to 485 trillion yen, the lowest since April-June 2011, when Japan was still suffering from two decades of deflation and economic stagnation, according to media reports.

For the April-June period, Japan’s exports dropped at a whopping annual rate of 56 per cent.

Private consumption dipped at an annual rate of nearly 29 per cent as shoppers stayed home, leaving malls and restaurants nearly empty of customers.

Elsewhere in the region, Thailand reported its biggest economic decline since the Asian financial crisis of 1998.