Japan’s GDP contracted -7.8% qoq in Q2, worse than expectation of -7.6% qoq. Annualized, GDP contracted -27.8%, versus expectation of -27.2%. The annualized contraction was worst since comparable data was available since 1980. It also well surpassed the -17.8% annualized decline in GDP in Q1 2009 during the global financial crisis.
Looking at some details, private consumption plunged -8.2% qoq, versus expectation of -7.1% qoq. Capital expenditure dropped -1.5% qoq, better than expectation of -4.2% qoq. External demand dropped -3.0% qoq, also slightly better than expectation of -3.2% qoq. Price index rose 1.5% yoy, below expectation of 1.9% yoy.
Economy Minister Yasutoshi Nishimura pledged “flexible, timely” action to support the economy. “We hope to do our utmost to push Japan’s economy, which likely bottomed out in April and May, back to a recovery path driven by domestic demand,” he added.
