Conditions in Japan's economy are deteriorating as household spending and factory production have slowed owing to the COVID-19 pandemic, with a key economic index logging its biggest drop in nine years in March, the government said in a report on Tuesday.
According to the Cabinet Office, the coincident index of business conditions dropped 4.9 points from February to 90.5 against the 2015 base of 100.
The decline marks the steepest drop since March 2011 when a powerful earthquake and tsunami pummeled the nation's eastern seaboard, triggering the worst nuclear disaster since Chernobyl in 1986.
As a result of the latest decline, the Cabinet Office maintained its assessment of the current state of the Japanese economy in the recording period as "worsening" amid a coronavirus-induced slowdown in industrial output and household expenditure.
Looking ahead, the leading index of business conditions tumbled 8.1 points to 83.8, the steepest drop since comparable data became available, meaning conditions in the world's third-largest economy are set to worsen further following a nationwide state of emergency being declared by Japanese Prime Minister Shinzo Abe in April.
The emergency declaration, which has been both expanded and extended, requested certain businesses to temporarily close and for people to refrain from leaving home unnecessarily, with the government also asking citizens to work from home and limit people-to-people contact.
As a result of a significant slowdown in economic activity amid the pandemic, Japan's economy has almost certainly fallen into a recession, with economists predicting data to be released next week by the Cabinet Office to show a second successive negative quarter of GDP.
Source: Xinhua |
