The Lower House approved a third extra budget for fiscal 2020 on Tuesday totaling ¥19.18 trillion to fund further steps to counter the pandemic, over opposition objections that it doesn’t sufficiently prioritize aid for medical care. A torrent of ugly economic stats from 2020 released this month have brought a bunch of reminders of why support is needed:
- Japan’s core consumer prices dropped 1.0% in December from a year earlier, the steepest fall in over 10 years, due largely to lower energy prices and the government’s travel subsidy campaign. A return to deflation is a nightmare scenario for Japanese policymakers after years of efforts to prevent prices from falling, but the pandemic is raising fears that it may become a reality.
- Exports plunged 11.1% in 2020 from the previous year, marking the largest fall in 11 years, as the COVID-19 crisis battered demand for industrial products such as cars. At the same time, domestic shipments of household appliances rose to their highest level since 1996, driven by strong demand for air purifiers as people stayed home more.
- Restaurant sales in Japan in 2020 plunged 15.1% from the previous year on an all-store basis, the steepest fall since statistics began in 1994, with izakaya pub sales plummeting 47.7%. Monteroza, which owns the Shirokiya and Uotami izakaya chains, famed for their cheap eats and all-you-can-drink deals, said this month it was closing 61 of its 337 locations in Tokyo.
- Four major department store operators saw their sales in the March-November period last year drop by around 30% to 40% from a year before. Even convenience stores saw sales fall in 2020 — for the first time since comparable data became available in 2005. At the other end of the cost spectrum, more than a dozen stores closed in Tokyo’s high-end Ginza Six mall last week.
- Officially, only 80,000 people have been dismissed or seen their job contracts terminated in Japan for reasons related to the pandemic, but the real figure is believed to be much higher. Listed firms offered voluntary early retirement to at least 18,635 employees in 2020, the highest level in 11 years.