Japan's economy shrinks 28% in 2Q, worse than 1st estimate

People take elevators at a shopping building in Tokyo on Aug. 24, 2020. Japans economy shrank at a record, even worse rate in the April-June quarter than initially estimated. The Cabinet Office said Tuesday, Sept. 8, 2020, Japans seasonally adjusted real gross domestic product contracted at an annualized rate of 28.1%, worse than the 27.8% figure given last month. (AP Photo/Eugene Hoshiko) (Copyright 2020 The Associated Press. All rights reserved)

TOKYO – Japan’s economy shrank at a record, even worse rate in the April-June quarter than initially estimated.

The Cabinet Office said Tuesday Japan’s seasonally adjusted real gross domestic product contracted at an annualized rate of 28.1%, worse than the 27.8% figure given last month.

The coronavirus pandemic, which has people staying home, restaurants and stores empty or closing, and travel and tourism nose-diving, has hurt all the world’s economies and many companies. But it has slammed Japan’s export-reliant economy.

Restoring growth will be a priority as the country prepares to choose a new leader to replace Prime Minister Shinzo Abe, who is resigning for health reasons. A vote among governing party members is expected next week.

Other data released Tuesday showed cash earnings improving somewhat, and consumer spending and other business activity is expected to rebound following the sharp drops as the country sought to bring the coronavirus pandemic under control.

“However, high-frequency data show that growth is struggling to gain pace, suggesting a very gradual and protracted recovery after the initial bounce. The near-term outlook therefore remains challenging," Oxford Economics said in a commentary.

Quarter-on-quarter, the economy contracted 7.9%, according to the revised figures, down from 7.8% in the preliminary data.

The annual rate shows what the number would have been if continued for a year.