Japan’s economic growth is expected to return to the pre-pandemic levels by the end of the fiscal year 2021, which starts on April 1 of the next year and ends on March 31, 2022, Yasutoshi Nishimura, the Japanese economic revitalisation minister, said on Tuesday.
The digitalisation of various business areas and creation of new business models are said to be the key drivers for the GDP growth. “If we pull it off, we will enter into the orbit of growth,” Kyodo news agency quoted Yasutoshi as saying.
The Japanese economy was hit unprecedentedly by the restrictive measures taken to contain the spread of COVID-19. From April to June 2020, when restrictions on people-to-people contacts were in effect in Japan and affected business activity, real GDP fell by 7.8 per cent compared to the previous quarter taking into account seasonal fluctuations, and in annual figures, the decline was estimated at 27.8 per cent.
Yasutoshi, who also serves as a minister responding to COVID-19 pandemic, believes that following the lifting of the state of emergency, the economy “has shown mostly strong tendencies toward recovery.”
Japan’s economy in April to June period shrank an annualised 27.8 per cent in real terms from the previous quarter, the sharpest contraction in 40 years as COVID-19 pandemic upended the economy, reports said on Monday.
It is the worst result since comparable data became available in 1980, said NHK World, as personal consumption plunged while people stayed at home and businesses closed their doors.
In April and May, as economic activity was restricted under a state of emergency during the coronavirus outbreak. Exports also fell as global economic activity froze, resulting in a sharp decline in auto-shipments.
Meanwhile, the Japan Times said many analysts have forecast that the nation’s economy will rebound by over 10 per cent in the July to September period from the current quarter, given the gradual resumption of economic activity after the end of virus emergency in late May. However, analysts also believe that it will take at least a few years for the economy to bounce back to pre-pandemic level.