The nation’s worst postwar quarterly economic slump is threatening to destroy Prime Minister Shinzo Abe’s reputation as the politician who led the country’s economic turnaround.
Japan’s gross domestic product fell at an annualized rate of 27.8 percent in April-June after price and seasonal adjustment, according to government data released Monday.
Since his 2012 comeback as prime minister, Abe has employed measures such as bold monetary easing under his Abenomics policy aimed at pulling the economy out of a slump caused by the global financial crisis of 2008.
In a parliamentary speech in January this year, Abe touted his achievements, saying that the country’s economy had grown 13 percent over the past seven years and that tax revenues were expected to hit a record high.
But then the pandemic struck, coming at a time when the Japanese economy was already in a downturn after peaking out in October 2018, following an expansion that began in December 2012.
“The economic contraction is consistent with global trends. It’s not attributable only to Japan,” a senior official of the ruling Liberal Democratic Party said, indicating that the downturn was unavoidable due to the coronavirus pandemic.
A senior government official said that the downside of the country’s economy was more solid than those of Britain and the United States, but Japan’s economy is now in a tough situation.
The Abe administration is seeking ways to curb the spread of the virus while reviving the economy, but no effective measures to attain the two goals are in sight at the moment.
Abe is set to become the longest continuously serving Japanese prime minister on Aug. 24, but that milestone may come as his political legacy faces one of its biggest challenges.
“The coronavirus has completely tarnished” the achievements made under Abenomics, one LDP source said.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.
Your news needs your support
Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.