Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Japan’s Economic Recovery Stalls Amid Winter Virus Emergency

Economic IndicatorsMay 17, 2021 08:27PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Japan’s Economic Recovery Stalls Amid Winter Virus Emergency

(Bloomberg) -- Japan’s recovery stalled last quarter, with the economy shrinking for the first time since last year’s pandemic collapse, as renewed restrictions to contain the coronavirus weighed on activity.

Gross domestic product shrank an annualized 5.1% from the prior quarter in the three months through March, ending a two-quarter streak of double-digit growth amid falling consumer spending and a drop in government outlays, the Cabinet Office reported Tuesday. Economists had forecast an overall contraction of 4.5%.

The worse-than-expected result comes at a critical time for Prime Minister Yoshihide Suga’s government as it struggles to contain virus cases with a targeted approach that limits the damage to the economy and a slow vaccine rollout.

Key Insights

  • The outlook depends largely on whether Suga can lift a third virus emergency by the end of May, as planned. Three more prefectures joined the emergency at the weekend, bringing about half of the economy under restrictions that are slightly stricter than the ones called in winter, but still much less draconian than Europe’s lockdowns.
  • Japan has had far fewer virus deaths than other G-7 economies, but a slow vaccine rollout has limited its tools for fighting the outbreak and getting the economy back into gear. So far, only about 3% of the population has received even a single dose.
  • Still, strong exports and industrial production continue to provide a bedrock of support to the economy, even though a rise in imports caused the trade-component of the GDP to go negative in the first quarter.

    What Bloomberg’s Economist Says...

“Looking ahead to 2Q, we see GDP resuming a slow pace of growth, assuming the latest state of emergency ends at the end of May as planned. Beyond that, the strength of the recovery will depend on how quickly vaccinations proceed and whether the Tokyo Olympics are held.”

-- Yuki Masujima, economist

For the full report, click here.

Get More

  • Private consumption, which accounts for more than half of the economy, fell 1.4% from the previous quarter on a non-annualized basis, compared with a 1.9% drop forecast by economists.
  • Business investment also slid 1.4%. Analysts had predicted a 0.8% gain.
  • Inventories added 0.3 percentage points to GDP, compared with a 0.2 percentage point boost expected by economists.
  • Net exports of goods and services subtracted 0.2 percentage point from growth, matching the median forecast.

(Adds data on GDP components.)

©2021 Bloomberg L.P.

Japan’s Economic Recovery Stalls Amid Winter Virus Emergency
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email