Tokyo, May 18 (efe-epa).- Japan’s gross domestic product (GDP) fell in the first quarter by 2 percent year-on-year, according to preliminary data published Monday by the government, representing the second consecutive quarter of economic contraction.
Between January and March, the world’s third-largest economy fell by 0.9 percent compared to the last quarter of 2019, according to the first estimate made by the Cabinet Office with inflation-adjusted data.
The GDP data provides the first estimation of the impact of the novel coronavirus pandemic on the Japanese economy, which accumulated drops in two consecutive quarters after falling by 0.7 percent year-on-year between October and December 2019 and 1.8 percent quarter-on-quarter.
Preliminary figures point to a recession in the Japanese economy, and although they are better than most analysts predicted, the impact of COVID-19 is feared to be even more noticeable from April, when the country declared a nationwide state of emergency.
Household consumption, the main pillar of the Japanese economy, was the factor that most contributed to the fall in GDP between January and March, with a drop of 2.8 percent compared to the same quarter of the previous year.
Domestic spending was clearly affected by the authorities’ recommendations to stay home as much as possible and by the cancellation of massive sporting and cultural events since the beginning of March due to the pandemic.
Exports, another important part of the Japanese GDP, fell by 6.2 percent year-on-year due to the interruptions in production, problems in the supply chain and a drop in global demand derived from the worldwide spread of the new coronavirus.
In this same scenario, corporate capital investment fell by 4.2 percent.
However, the state investment increased by 2.5 percent compared to the first quarter of 2019, driven by the multimillion-dollar stimulus package that the Shinzo Abe government has carried out to mitigate the effects of the pandemic.
At an annualized rate, a measure used to estimate the rate of economic expansion, the Japanese economy fell 3.4 percent in the first quarter. EFE-EPA