Japanese economy hit by biggest contraction on record

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Japanese economy hit by biggest contraction on record

The Japanese economy has suffered its third consecutive quarter of economic contraction, bringing real GDP to a decade-low ¥485trn and wiping out the benefits of ‘Abenomics' stimulus policies deployed since late 2012 by Prime Minister Shinzo Abe.

April to June 2020 saw the economy shrink an annualised 27.8%, the biggest market decline since comparable data began in 1980, and above the median market forecast of 27.2%.

The figure is ten percentage points higher than the knock the Japanese economy suffered in the first quarter of 2009 as the world reeled from the collapse of Lehman Brothers, at which time the contraction struck at 17.8%.

The figures are the worst since Japan started reporting GDP statistics in 1955, although is less severe than the declines seen in the US and Europe.

However in neighbouring South Korea 2Q output declined by just 3.3%. In Taiwan, the government reported a fall of 0.7% for the 2Q.

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