Japan yesterday reported that its economy contracted at an annual rate of 2.2 percent in the January-to-March period, less than initially estimated.
The update from the Japanese Cabinet Office was an improvement on the 3.4 percent contraction reported earlier.
It said that private sector demand had not dropped as much as previously estimated.
The revision was not surprising and a recovery is expected as countries reopen after their COVID-19 shutdowns, analysts said.
The annual rate is the projected number if the same level of growth or contraction in that quarter lasted for a whole year. The quarter-on-quarter drop was 0.6 percent for real GDP.
The earlier quarter-on-quarter growth estimate was minus-0.9 percent.
Japan’s economy, the world’s third largest, has been stagnant for years and was in trouble even before the pandemic hit consumer spending and other main drivers of growth.
The country also imposed only limited shutdowns to fight the novel coronavirus, leaving less room for a rebound than in some other countries.
SMBC Nikko Securities Inc chief market economist Yoshimasa Maruyama said that the upward revision was not surprising.
Given the reopening of economies worldwide a recovery is likely, helped by pent-up demand.
“The Japanese economy will rebound very quickly, but after that, it will again falter and stall,” Maruyama said, as other problems would not disappear even if the fallout from COVID-19 could be brought under control.
A sales tax hike in October last year depressed consumer spending, a major factor behind a 7.2 percent contraction in the final quarter of the year, even before the pandemic hit.
Growth was flat in the quarter before that through September.
Japanese government has ramped up spending and rolled out an unprecedented amount of stimulus to help businesses and consumers weather the crisis.
The unemployment rate has been rising slightly and was at 2.6 percent in April, but joblessness has not shot up in Japan, as it has in the US or other nations where layoffs are more common. Japan also has long had a labor shortage problem.
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