Tokyo, June 8 (efe-epa).- Japan’s government on Monday revised upward the contraction of its gross domestic product (GDP) for the January-March quarter, which shrank 0.6 percent from the previous quarter, compared to the 0.9 percent decline initially estimated.
Japan’s GDP had also posted a contraction of 1.9 percent between October and December last year from the previous quarter. Two consecutive quarters of economic decline confirms that Japan has fallen into recession for the first time since 2015.
The impact of the coronavirus pandemic in the first quarter of this year, as reflected in the negative GDP development between January and March, comes on the heels of an increase in Japan’s consumption tax rate in October, which also led to a contraction of the Japanese economy.
Comparing the first quarter of 2020 with the same period last year, the indicator released on Monday put the trend growth at 0.0 percent, compared to a 0.1 percent decline in the first estimate of the data released by the Japanese government on May 18.
Following the release of the first data on GDP growth in the first quarter of this year, analysts had already indicated that the decline recorded was lower than expected although they anticipate the impact of COVID-19 to be more noticeable in the second quarter of the year.
Part of the latest revision of GDP developments is linked to private capital expenditure, which was calculated in May with a quarterly drop of 0.5 percent but has now been revised to an increase of 1.9 percent.
Household spending between January and March shrank 0.8 percent compared to the fourth quarter of 2019, which is the same as the initial estimate released in May.
The coronavirus pandemic has had a very strong impact on tourism activity in Japan, which has fallen to levels not seen in many years, due to the closure of its borders to contain the spread of COVID-19 in the country.
Meanwhile, Japan recorded a current account surplus of 262.7 billion yen ($2.4 billion) in April, the government said Monday.
The figure is 84.2 percent lower than that recorded in the same month of 2019 and 99.7 percent lower than in March, according to data published by the Japanese ministry of finance.
Japan’s trade balance posted a deficit of 966.5 billion yen, eight times more than in the same month a year earlier, and in contrast to the 10.3 billion yen surplus recorded in the previous month.
Exports fell 23 percent year-on-year to 4.9 trillion yen while imports declined by 9.5 percent to 5.8 trillion yen.
The balance of services registered a deficit of 630.2 billion yen, a year-on-year increase of 73.5 percent, in contrast to the surplus of 7.2 billion yen posted in March.
The income account recorded a surplus of 1.98 trillion yen in the fourth month of 2020, down 7.7 percent year-on-year.
Transfers recorded a negative balance of 12.4 billion yen, which is 23 times more than the deficit recorded a year earlier and 53 percent less than in the previous month.
The balance of payments reflects payments and income from the foreign exchange of goods, services, income and transfers, and is considered one of the largest commercial indicators in a country. EFE-EPA