Japan’s economy shrinks by over 28%

ANKARA

Japan's economy has been hit hard by COVID-19 as the latest figures reveal the annual growth rate has shrunk by 28.1%.

Earlier, the government data in August estimated that the country's gross domestic product (GDP) shrunk by 27.8%.

GDP is the total value of goods and services produced in a country.

The downslide of the April-June quarter is the steepest since 1955 in Japan’s economic history, Kyodo News Agency reported.

The government, which is also in a race to choose its next leader after incumbent Prime Minister Shinzo Abe leaves office due to health reasons, said in a report the decline in the GDP “corresponds to a 7.9% decrease on a seasonally adjusted quarterly basis, contracting for the third consecutive quarter”.

“In the second quarter of 2020, private consumption bore the brunt of the government's state of emergency to curb the virus spread, under which local governments asked people to stay at home and nonessential businesses to suspend operations. Hard lockdowns in many major cities abroad, meanwhile, hit exports such as cars,” the report added.

The country’s economy was contracting since October-December with a 7% year-on-year fall, due to a hike in consumption tax and the continued impact of the US-China trade spat.

The government said its economic data reference can be dated back to 1955, however, the comparable data is only available from the April-June quarter of 1980 onwards.

The country has reported nearly 73,000 cases of the coronavirus so far. The death toll has hit 1,363.