Japan April Household Consumption Expenditure Down 11.1%... Largest Drop Due to COVID-19 Impact

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Japan's household consumption in April fell at the largest rate since statistics began in 2001 due to the impact of the novel coronavirus infection (COVID-19).

According to NHK and others on the 5th, Japan's Ministry of Internal Affairs and Communications announced that in this year's April household survey targeting households with two or more members, the real consumption expenditure per household, excluding the effects of price changes, was 267,922 yen, a decrease of 11.1% compared to the same month last year.

This marks the seventh consecutive month of decline and is the largest drop since statistics began in January 2001. The decline rates were 5.1% in October last year, 2.0% in November, 4.8% in December, 3.9% in January this year, 0.3% in February, and 6.0% in March, before sharply increasing in April.

The consumption contraction is attributed to the Japanese government's declaration of a state of emergency in April due to the COVID-19 situation, the rapid increase in confirmed cases, and authorities urging restraint in social and economic activities. Detailed data shows group travel expenses decreased by 97.1%, hotel and other accommodation fees dropped by 94.7%, restaurant consumption fell by 63.3%, and spending at bars and pubs declined by 90.3%. Airfare also decreased by 94.5%, and admission fees for cultural activities such as movies and theater dropped by 92.7%.

However, spending on health-related consumables such as masks increased about 2.2 times. Also, as time spent at home increased, consumption of related products rose. Computer-related expenses increased by 72.3%, and internet connection fees rose by 17.7% as internet usage at home increased. Spending on pasta, frozen prepared foods, and rice also increased due to more meals being eaten at home.

Chief Cabinet Secretary Yoshihide Suga said, "COVID-19 is having a serious impact on the economy, including personal consumption. We need to endure while devising countermeasures and gradually restore everyday economic activities." He added, "We are preparing all measures to protect people's lives and employment and to allow businesses to continue, and through the supplementary budget, we are preparing measures totaling more than 230 trillion yen."