Japan’s economy contracts again as coronavirus restrictions wreak havoc

Japan’s economy has started to contract again as the Olympics and Paralympics welcome the battle to contain the coronavirus that is weighing on production.

The country’s gross domestic product (GDP) fell 1.3% in the first three months of 2021.

This equates to a drop of more than 5% at an annualized rate.

The new figures offset the improvement from the previous quarter, when production rose 3 percent better than expected from the previous three months.

Even that wasn’t enough to prevent an annual reduction of well over 4% for 2020, the year Japan originally planned to host the world’s athletes to the ultimate mega sporting event.

With vaccine deployment still extremely slow, COVID-related restrictions remain the norm in several Japanese regions.

The northern city of Sapporo – host of the marathon and walking events during the delayed Tokyo 2020 Games – was recently placed in an expanded state of emergency, as it was extended to cover the prefectures of Hokkaido, Okayama and Hiroshima.

The majority of the Japanese public is against holding the Olympic Games in Tokyo in the current situation, several surveys have found © Getty Images
The majority of the Japanese public is against holding the Olympic Games in Tokyo in the current situation, several surveys have found © Getty Images

The three regions have joined Tokyo, Osaka, Kyoto, Hyogo, Aichi and Fukuoka on being placed under more stringent measures, which are expected to be in place until May 31.

As part of emergency measures, catering establishments are asked to close at 8 p.m., while shops and cinemas are temporarily closed.

These restrictions seem likely to be reflected in the GDP figures for the second quarter and the year 2021.

Infections are said to be ongoing at around 6,000 a day, with medical systems in some areas said to be under strain.

The new economic figures were released on the eve of a three-day meeting of the International Olympic Committee’s Coordination Commission which is overseeing attempts to ensure that the postponed Games can proceed as rescheduled, despite the extreme difficulties presented by the pandemic.

Polls have repeatedly indicated that a majority of the Japanese public does not want the event to run according to the new schedule, according to which the Olympics will run from July 23 to August 8 and the Paralympics from August 24 to August 5. September.

With a general election slated for before the end of the year, this seems to leave the Japanese government in a particularly difficult position.


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