Japan’s economy shrinks at record pace

Japan is hit by its biggest economic contraction on record in the second quarter of this year. The economy shrank at annual rate of 27.8 percent in April –June, the worst decline on record, as the coronavirus pandemic thwarted consumption and trade, according to government data released on Monday.

The world’s third largest economy was already ailing when the virus outbreak struck towards the end of last year. The fallout has since gradually worsened both in COVID-19 cases and social distancing restrictions.

Japanese media reported that the latest drop was the worst since World War II. The previous worst contraction was in 2009, during the global financial crisis of 2008-09.

The economy shrank 0.6% in the January- March period, and contracted 1.8 % in the October- December period last year, indicating that Japan slipped into recession in the first quarter of this year. Recession is generally defined as two consecutive quarters of contraction.

For the April-June period, Japan’s exports dropped at a whopping annual rate of 56%, while private consumption dipped at an annual rate of nearly 29%.

That was without any full shutdown of businesses to contain coronavirus outbreaks, which have worsened in the past month, pushing the total number of confirmed cases to over 56,000.

Analysts say the economy is expected to recover gradually, once the impacts of pandemic reduce. Japan’s export-dependent e