Japanese GDP collapsed 7.8% between April and June 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 drop of 7.8% in the second quarter, according to preliminary data released Monday by the government, follows declines in the first quarter (-0.6%, against -0.9% announced in a first estimate in May) and in the fourth quarter of 2019 (-1.9%), which marked the entry into recession of the country.
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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 Japan since comparable data was put in place in 1980. The consensus of economists polled by the Bloomberg agency expected a slightly smaller decline in the second quarter ( -7.5%). 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. 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 euro zone thus showed a 12.1% decline in its GDP in the second quarter, weighed down by the even greater dips in the French, Italian and Spanish economies.
