Bloomberg
Published May 18, 2021 03:15
(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
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.
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(Adds data on GDP components.)
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Written By: Bloomberg
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