Japan’s economy shrank in the first three months of 2021, continuing a swing between growth and contraction as its plodding vaccination campaign threatened to stall its recovery even as other major economies appeared primed for rapid growth.
Since the coronavirus emerged, Japan’s domestic demand has experienced cycles of shrinkage and expansion, as coronavirus cases have risen and consumers have retreated indoors, and as infections have then dropped and businesses have welcomed customers back.
Currently, Japan is suffering a resurgence in cases, with much of the country under a state of emergency and deaths climbing, especially in Osaka. The yo-yoing economic pattern, analysts said, is unlikely to stop until the country has vaccinated a significant portion of its population, an effort that has just begun.
Japan’s economy, the world’s third largest after the United States and China, shrank 1.3 percent during the January-to-March period, for an annualized drop of 5.1 percent. The contraction followed two consecutive quarters of expansion.
Growth rocketed in the second half of last year as consumers, who had spent months holed up at home to avoid the virus, piled into stores and restaurants.
The rebound went a long way toward digging the economy out the early months of the pandemic. But the turnaround is fragile and will be hard to maintain as long as the country faces the threat of the virus.