Japan’s GDP posted its worst contraction on record

Japan’s economy witnessed its worst post-war slump in Q2 2020 due to the massive demand and supply shock resulting from the lockdown measures required to address the virus outbreak. Real GDP declined at an unprecedented annualised rate of 27.8% in Q2 2020 (the largest on record).

Household consumption, which accounts for around 60% of Japan’s GDP, and is a key driver of the economy, plummeted in Q2 by 8.2% q/q (28.9% annualised) as the coronavirus regulations compelled consumers to stay at home. Private residential and non-residential investment declined by 0.2% q/q and 1.5% q/q respectively (-0.8% and -5.8% annualised) and exports contracted by 18.5% (56% annualised), with imports down by 0.5% q/q (2.1% annualised).
 

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