According to the report of GDP from January to March 2020 published by the Cabinet Office, Government of Japan (May 18, 2020), after deducting the actual seasonal adjustment factors influenced by price changes, GDP declined by 3.4% year-on-year, and showed negative growth for two consecutive quarters; mainly due to the spread of the COVID-19 pandemic, the suspension of business operations etc.

In terms of projects, personal consumption, which accounts for more than half of the overall GDP, fell by 0.7%, private equipment investment decreased by 0.5%, residential investment decreased by 4.5%, and public investment decreased by 0.4%. All major projects showed negative growth. In addition, exports from January to March also fell by 6.0%, the largest decline since the second quarter of 2011.

 

Japan’s GDP decline in the first quarter was not as bad as expected, mainly due to a small decrease in personal consumption and equipment investment; however, the Japanese Cabinet Office officials believed that GDP from April to June 2020 would also be difficult to avoid a serious decline. The spread of the COVID-19 pandemic, private organizations predict that Japan’s GDP will decline significantly by about 20% from April to June.