Japan to Lose Trillions of Yen in Consumption with Virus Emergency

  • 2/5/2023
  • 05:21
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Tokyo, Jan. 06, 2021, SPA -- A monthlong state of emergency planned by the Japanese government to contain a resurgence of novel coronavirus infections is expected to knock trillions of yen off private consumption, with some economists predicting the economy will return to contraction, Kyodo reported. Expected economic impacts of a state of emergency in Tokyo and three neighboring prefectures, which the government of Prime Minister Yoshihide Suga is considering declaring on Thursday, will likely be smaller than those seen after the first emergency declaration in April last year in Tokyo and six prefectures. The declaration then was later expanded to the entire nation and fully lifted in late May. Expected restrictions this time, though not legally binding and limited to the Tokyo area, could still wipe out a significant part, if not all, of growth previously expected in the January - March quarter, economists said. An economic slowdown in the capital could have a ripple effect, and there is even a possibility that the planned state of emergency will be expanded, they said. Tokyo reported more than 1,200 new coronavirus infections Tuesday, with a record-high 111 COVID-19 patients in serious condition. It was the second-highest figure for the capital, after 1,337 cases reported on Dec. 31. With the first state of emergency prompting people to refrain from nonessential outings and a range of businesses to cut operating hours, Japan's gross domestic product contracted an annualized real 29.2 percent in the April - June period from the previous quarter. As economic activities restarted gradually after the emergency was fully lifted, the economy showed a sharp rebound in the following quarter, growing an annualized 22.9 percent. According to the average forecast of 35 economists polled in December by the Japan Center for Economic Research, the economy was projected to grow an annualized 1.31 percent in the January-March term following 3.44 percent growth in the quarter to December. --SPA 20:50 LOCAL TIME 17:50 GMT 0026 www.spa.gov.sa/w1480054

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