Japan Government Sees Economy Shrinking This Year On COVID-19 Hit

• Japan’s government expects the economy will contract this year as activity slowly recovers from the coronavirus crisis, with a return to growth seen next year, four government sources told Reuters.
• The world’s third-largest economy is expected to have contracted 23.9% in the second quarter as the pandemic slammed global demand and Japan’s state of emergency prompted people to stay at home and businesses to close. Preliminary GDP data will be released on Aug 17.
• Reflecting uncertainty over how long the pandemic will last, the government will take the unusual step of announcing several growth scenarios for 2020 and 2021 this week, based on whether the pandemic will end quickly or be prolonged. Real GDP is expected to shrink in the current fiscal year through March 2021 under either scenario, but it would be smaller than a 5% contraction, one of the sources said.

(Source: Reuters)