Japan in obvious 16.2 percent Covid-19 related decline in household spending in May
Kanako Mita and Lee Jay Walker
Modern Tokyo Times
The coronavirus (Covid-19) crisis in Japan hit household spending in May. Thus the 16.2 percent downturn from twelve months earlier isn’t a surprise. After all, in all nations engulfed by the coronavirus crisis, the array of negative economic data applies to various degrees.
Also, the Golden Week period in early May is a time when many individuals go on holiday, meet family members, visit friends, or relax in other ways that impact positively on the economy. However, the state of emergency, fear of catching the coronavirus, limited options, the worry about job security, and other negative factors meant prudence would derail household spending.
It is unfair to lump this unique negative Black Swan with records because it doesn’t provide a real picture of the economy. Indeed, the economy was spluttering before the coronavirus crisis based on the increase in consumption tax late last year.
The BBC reports, “Economists expect a recovery in spending to be slow and fragile as consumers remain reluctant to loosen the purse strings even after a nationwide state of emergency was lifted in May.”
Equally, just like household spending doesn’t provide a picture of the real economy, the same applies to the decline in real wages of 2.1 percent. For overtime was naturally curtailed or reduced for many workers. Thus, like household spending, it is part of the economic convulsions related to coronavirus.
Japan is hoping for reduced economic tensions between America and China, the coronavirus crisis to be contained, and for economic stimulus packages to succeed in boosting the economy.
Hence, Japan is hoping for a gradual rebound to ease itself out of the economic doldrums later this year. However, like all nations, the convulsions of the coronavirus pandemic remains and major economic partners are also suffering from the crisis.
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