Japan

摘要

The pandemic hit the economy extremely hard, causing a 7.9% q/q contraction in Q2 2020, the largest quarterly drop on record. Spending and activity have recovered after the state of emergency was lifted in late May and we expect a robust rebound in growth in Q3 That said, forward-looking indicators paint a mixed picture, so we expect the subsequent recovery to be uneven and protracted. On the political side, Yoshihide Suga succeeded Shinzo Abe as Prime Minister in mid-September and will likely continue to follow the policy path his predecessor charted. We forecast GDP to shrink 5.7% in 2020 before growing 2.5% in 2021 (compared to -6.0% and +2.8% previously).