NEW YORK TIMES



 

Japan’s economy shrank by 7.8 percent in the second quarter of the year, posting its worst performance on record as the coronavirus pandemic ground economic activity to a near halt in April and May.

The nosedive in output in the three-month period — an annualized drop of 27.8 percent — was the third straight quarter of contraction for Japan, the world’s third-largest economy after the United States and China.

It came on top of a 0.6 percent decline in the first quarter of 2020, or an annualized decrease of 2.2 percent, the country’s government said on Monday.

Already weakened by a tax increase, slowing demand from China and a series of natural disasters last fall, Japan’s economy became the first among major nations to officially fall into recession when the pandemic hit, causing exports to plunge and effectively obliterating the country’s tourism sector.

“The pandemic’s total impact on the economy up to this point is almost the same as the 2008 financial crisis,” said Michinori Naruse, an economist at the Japan Research Institute.

But with the financial crisis, “things got worse slowly,” he said. “This time, they got bad all at once.”

The slowdown in Japan, while crippling, was not as severe as the 9.5 percent drop by the United States in the second quarter, which erased almost five years of growth. Britain, whose economy has taken the hardest hit from the pandemic in Europe, fared even worse, with the government reporting a staggering 20.4 percent quarterly decline last week.

And there are signs that the worst pain may be over in Japan. The country racked up most of its economic damage in April and May, when Prime Minister Shinzo Abe declared a national emergency in an effort to check a slow but steady rise in coronavirus infections.