Japan’s household spending suffered the biggest annual drop on record in April as lockdown measures to contain the coronavirus 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, government data showed on Friday, 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 6.0% decline in March.
Many analysts expect any rebound from the coronavirus pandemic to be slow and fragile, despite the nationwide lifting of a state of emergency last month.
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 U.S.-China trade war.
The government has compiled two stimulus packages worth a combined $2.2 trillion to combat the virus fallout on the economy, which slipped into recession in the first quarter.
While Abe has lifted nationwide lockdowns, analysts polled by us expect the world’s third-largest economy to suffer an annualised 22% contraction in the current quarter and recover only modestly in the second half of this year.