With mobility rebounding and the state of emergency finally being lifted across all prefectures this weekend, economic activity should enter Q2 with some momentum. While the second state of emergency has been less restrictive and more targeted than the first, bars and restaurants have still been hit hard by 8pm curfews in most major urban areas and by fears over infection. The number of people going to restaurants has doubled from where it was in mid-January at the height of the third wave as regional restrictions have been lifted. Once Greater Tokyo – the last region still facing restrictions – exits its state of emergency on Sunday night, activity in COVID-exposed sectors should rebound further. So while it’s still touch-and-go whether the economy will avoid a contraction this quarter, GDP should rise by around 1% q/q next quarter as domestic demand bounces back from the third wave.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services