Japan’s real gross domestic product is believed to have contracted an annualized 5.1% in January-March, the first drop in three quarters, an average estimate by 12 private think tanks shows.
On a nonannualized basis, the average forecast was for a decline of 1.3%.
During the final quarter of fiscal 2020, personal consumption weakened after the government declared a second coronavirus state of emergency in January, covering Tokyo and some other prefectures.
The Cabinet Office will release preliminary GDP data for January-March on May 18.
The Japanese economy is expected to continue falling in April-June after the government declared a third state of emergency, effective from April 25.
In the areas under the emergency, including Tokyo and Osaka, large commercial facilities are subject to business suspension requests.
Given this, negative GDP growth is forecast to continue into the first quarter of fiscal 2021.
The average forecast for personal consumption in January-March envisions a drop of 2.1%.
“Spending on in-person services, such as restaurants and hotels, fell sharply” partly due to the suspension of the government’s Go To consumption stimulus programs, an economist at NLI Research Institute said.
Exports are believed to have grown 1.3%, far weaker than the previous quarter’s rise of 11.1%. The deceleration apparently reflected a pause in U.S. demand recovery for automobiles and some other products.
Corporate capital spending is believed to have increased 0.6%, supported by a continued pickup in investment appetite mainly in the manufacturing sector.
BNP Paribas (Securities) Japan Ltd. expects that the economy would contract an annualized 1.5% in April-June if the third state of emergency is extended to the end of May from the currently planned expiration, May 11.
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