Japan’s 2Q GDP Falls into Sharpest Postwar Contraction, Raising a Concern for New Leader

Japan’s 2Q GDP Falls into Sharpest Postwar Contraction, Raising a Concern for New Leader

Japan’s GDP for the second quarter of 2020 fell into sharpest postwar contraction after the coronavirus outbreak weighed on businesses more than initially thought, the Government said Tuesday.

Japan reported its record economic contraction by an annualised 28.1% in April-June period, worsening than a preliminary reading of a 27.8% shrink, a decline for the third consecutive quarter, putting the new prime minister under great pressure with a difficult task in order to avert a steeper recession. 

On the same day, the Cabinet Office has also approved a spending of 671.4 billion yen ($6.32 billion) from emergency budget reserves to secure coronavirus vaccines. The total number of Covid-19 infections in Japan surpassed 72,300 as of Monday with 1,380 deaths. 

However, the economy already showed a recovery sign after the factory output in July rose at the fastest pace on record due to a rebound in demand for automobiles. 

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