The government said Wednesday that the Japanese economy shrank at an annual rate of 3.6% from July to September as the wave of Tokyo-coronavirus infections weighed on travel and other activities.
According to the government, last quarter’s forecast was downgraded from previous reports of a 3.0% reduction, reflecting weak consumer spending and trade.
Every quarter, the economy, the indicator used by most economies, shrank by 0.9%, but earlier estimates were down by 0.8%.
The world’s third-largest economy was sluggish before the pandemic. The recovery was appropriate due to the precautionary measures taken to control the COVID-19 infection. In particular, problems with the supply chain of computer chips used in automobiles have also been sacrificed.
The recent large-scale outbreak of coronavirus in Japan, which occurred at the end of summer, has declined sharply in the number of cases and has been retreating so far. However, it was a demand for restaurants, hotels, and other service sector industries that usually hit during the busy summer travel season and hurt limited business activities and travel.
Norihiro Yamaguchi of Oxford Economics said in a comment that consumer spending is recovering and is likely to lead to a recovery this quarter.
“Production and exports are expected to recover, albeit at a moderate pace, as supply chain disruptions in the automotive sector have eased,” he said.
The latest data show lower levels of private inventories and weaker government and personal consumption than previously reported. It also shows that wages have shrunk by 0.4% instead of rising by 0.1% as previously reported.
The Japanese Cabinet has approved a record $ 56 trillion, or $ 490 billion, stimulus to save the economy from the downturn caused by the coronavirus pandemic, including cash distribution and assistance to sick companies. bottom. Parliamentary approval of the plan is expected this month.