Japan still in recession but economy better than feared

A man looks at an electronic stock board in Tokyo last month. (AP pic)

TOKYO: Japanese growth figures were better than initially feared in the first quarter, according to official data published on Monday, but the world’s third-top economy was still mired deep in recession.

Gross domestic product contracted by 0.6% in the January-March period compared to the previous quarter. Authorities had initially reported a 0.9% contraction.

Economists had expected the revision, with the market forecasting a 0.5% contraction.

The figures confirmed that Japan was suffering its first recession – defined as two consecutive quarters of contraction – since 2015.

A tax hike and typhoons hit Japan hard in the fourth quarter of 2019, sparking a 1.9% contraction compared to the previous period – even before the coronavirus pandemic battered the economy both in Japan and worldwide.

Japan has been hit less hard than most advanced economies by the coronavirus, with just over 17,000 cases in the whole country and around 900 deaths.

However, authorities urged people to stay indoors for several weeks at the height of the outbreak in Japan, which affected the capital and economic powerhouse Tokyo the most.

Most analysts believe that Japan’s economy will suffer further in the coming months as the effects of the restrictions on economic activity feed into the figures.