Japan: January-March GDP -0.6%, annualized -2.2%
The Japanese economy contracted 0.6% in the first quarter of the year, confirming the data previously released by the government during the health emergency caused by the coronavirus. On an annualized basis, the decline is 2.2%, although less than analysts’ initial estimates of a minus 2.8%. The latest indications take into account Japan’s Ministry of Finance’s downward revision of capital expenditures in the services sector, released last week, from a previous plus 4.3% to an expansion of just 0.1%, reflecting the depressive cycle underway in the third world economy, exacerbated with the expansion of the pandemic. In the same reference period, private consumption – which contributes to the formation of half of the GDP, recorded a decline of 0.8%, while exports registered a minus 6%. Japanese manufacturing activity, on the other hand, marks the smallest contraction of the last five months in July, a signal that could indicate that the worst moment of the consequences of the Coronavirus on the Japanese economy is behind us. In fact, the flash SME index developed by Jibun Bank in collaboration with Markit stood at 45.2, an improvement compared to June (40.1) and also compared to the preliminary estimate of the same figure in July, which had stopped at 42, 6.