Japan's GDP in fiscal year 2020 shrank 4.6 per cent in real terms, down for the second straight year, marking the largest annual contraction on record since data compilation began in 1955, government statistics revealed on Tuesday.

According to the preliminary data released by the Cabinet Office, the previous record decrease was a 3.6 per cent drop in fiscal 2008 marked in the wake of the global financial crisis, reports said.

coronavirus in japan
coronavirus in japanGetty images

Meanwhile, government statistics showed the country's economy in the January-March period contracted an annualised real 5.1 per cent compared to the previous quarter, the first decline in three quarters, due to a second state of emergency over the Covid-19 pandemic,.

The decrease in real GDP, the total value of goods and services produced in the country adjusted for inflation, corresponds to a 1.3 per cent contraction on a seasonally adjusted quarterly basis, government data showed.

Covid Impact

Amid a resurgence of Covid-19 infections since November 2020, the government declared the second state of emergency in early January for the Tokyo metropolitan area. It was expanded to 11 out of Japan's 47 prefectures within a week before it was fully lifted in late March.

The emergency state requiring people to stay at home and restaurants and bars to shorten opening hours led to a sharp drop of 1.4 per cent in private consumption. 

So far, only 1 per cent of the population is fully vaccinated, a much lower fraction than in the United States, Europe, India, and China. That has led some to ask whether the Olympics in July would be conducted as planned or no.

Japan's regulators have authorized only one vaccine, produced by Pfizer and BioNTech and the Moderna and AstraZeneca vaccines may receive the green light on 20 May, according to NHK. Japan has weathered the Covid pandemic relatively with 640,000 cases and 10,900 deaths since early 2020.

(With inputs from IANS)

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