Japan’s Household Spending Contracts at Fastest Pace on Record During April
As a result of the coronavirus pandemic led lockdown, household spending in Japan fell at the fastest pace ever recorded during April as
As a result of the coronavirus pandemic led lockdown, household spending in Japan fell at the fastest pace ever recorded during April as businesses closed down and consumers stayed indoors to prevent the spread of the virus. According to data released by the government, household spending fell by 11.1% YoY in the month of April after declining by 6% in the previous month.
On a slightly positive note, however, the figure came in better than economists’ forecast for a 15.4% decline. Analysts remain cautious about household spending levels recovering even as the lockdown is lifted, which could keep the economy under significant pressure in the near future.
Household spending across Japan had been in strain even before the pandemic hit, on account of US-China trade tensions and the government’s sales tax hike which was implemented in October 2019. Japan’s economy had contracted on account of these factors during Q4 2019, sending it into recession by as early as Q1 2020.
Despite the state of emergency being called off and economic activity resuming slowly across the country, economists fear that the Japanese GDP for Q2 2020 could fall to -22%. Meanwhile, recovery is also expected at a moderate pace into the second half of the year, which could keep Japan in a state of recession for much longer than other countries around the world.
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