Japan’s economy shrinks at record pace

The Japanese economy contracted at an annualized rate of 27.8% in the April-June quarter as a result of the coronavirus crisis, according to government data released Monday.

The Cabinet Office reported that the country’s preliminary seasonally adjusted real GDP fell 7.8% quarter on quarter. It was the third straight quarter of contraction for Japan’s economy.

Local media reported that the contraction was the worst since World War II. The previous worst contraction was during the global financial crisis of 2009.

Private consumption, which accounts for more than half of Japan’s economy, fell 8.2% for Q2. Exports have also fallen sharply.

Japan’s economy was already struggling with low growth when the pandemic struck. The government has reopened the economy by gradually lifting the state of emergency measures in late May. However, analysts fear that the new spike in infections may again hit business and household spending.