TOKYO, 5 June 2020 – Japan’s household spending suffered the biggest annual drop on record in April as lockdown measures to contain COVID-19 kept consumers home and businesses shut, although the fall was not as large as analysts had forecast.
Household spending tumbled 11.1% in April from a year earlier, a recent government data showed, marking the fastest pace of decline since comparable data became available in 2001.
The drop, which was slower than a median market forecast for a 15.4% fall, followed a 6% decline in March.
Many analysts expect any rebound from the COVID-19 pandemic to be slow and fragile, despite the nationwide lifting of a state of emergency last month.
Japanese Prime Minister Shinzo Abe announced a state of emergency in April requesting citizens to stay home and businesses to close, hammering an economy that was already suffering from the hit from last year’s sales tax hike and the US-China trade war.
The government has compiled two stimulus packages worth a combined US$2.2 trillion (RM9.4 trillion) to combat the virus fallout on the economy, which slipped into recession in the first quarter.
Japan’s economy slipped into recession for the first time in 4-1/2 years in the last quarter, putting the nation on course for its deepest postwar slump as the virus hurts businesses.
With infections in Japan exceeding 15,000, the government extended a state of emergency on Monday through to the end of the month, pressuring companies to shut down factories and stores longer than previously expected.