Japan’s Household Spending Declines at Slower Than Expected Pace
Household spending in Japan declined at a slower than forecast pace amid the shutdowns as consumers rushed to stock up essential goods, including food items, masks and toilet paper across the country. Household spending among Japanese consumers fell by 0.3% during February – the fifth consecutive month of decline.
However, the rate of decline was far less than economists’ expectations and the figures from the previous month, both of which stood at 3.9%. While the demand for essential products remained high and supported overall household spending, sectors like travel and entertainment took a big hit at consumers stayed indoors amid the coronavirus outbreak.
Despite the better than expected figures, economists anticipate a worse performance in March when more lockdown measures were rolled out across Japan. The Japanese economy is expected to fall into recession on the back of worsening economic conditions within the country and around the world.
On Monday, PM Shinzo Abe announced that the government would undertake fiscal measures worth around 20% of the GDP to compensate for the economic damage wreaked by the coronavirus pandemic. The package also includes $358 bullion worth of indirect fiscal spending in order to support the economy.
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