Japan household spending drops 11.1pc in April

7 June, 2020 12:00 AM printer

TOKYO: Japan's household spending slumped again in April, falling 11.1 percent from a year earlier, government data showed recently, as the world's third-largest economy struggled with the impact of the coronavirus pandemic.

The figure released by the internal affairs ministry was largely in line with market expectations of a 12.75 percent drop. It was the seventh straight month of declines since October, when the government hiked a sales tax, reports AFP.

"The new coronavirus is having a serious impact on the economy including spending by individuals," chief cabinet secretary Yoshihide Suga told reporters, asked about the government's view on the latest figure.

"We think it is necessary for us to return to regular economic activities step by step while taking counter-infection measures, as businesses are trying to survive the current situation," added Suga, the top government spokesman.

The April drop was partly attributed to declines in spending on transport and telecommunications, as well as on leisure activities.

The latest figures come after official data last month confirmed Japan dived into its first recession since 2015, shrinking by 0.9 percent in the first quarter as it wrestles with the fallout from the coronavirus.

The drop in gross domestic product followed a 1.9 percent decline in the fourth quarter of 2019 as the tax hike and typhoons hit Japan hard -- even before the pandemic shut down much of the economy.

Fears about the economic impact of the virus have shaken global and Japanese financial markets and the Bank of Japan last month expanded its emergency monetary easing and cut growth forecasts for the country.