Photo/Illutration A shopper buys food via a drive-through system in Yokohama on May 3. (Shuya Iwamoto)

Japan’s gross domestic product will shrink by 33 percent in the April-June quarter under the prolonged state of emergency to deal with the new coronavirus pandemic, Ryutaro Kono, chief economist at BNP Paribas Securities (Japan) Ltd., predicted.

The quarter-to-quarter forecast would be much worse than when GDP contracted by 17.8 percent in the January-March period of 2009 after the collapse of U.S. investment bank Lehman Brothers triggered a global financial crisis.

According to Kono, the current health crisis will continue to push down consumer spending and force companies to reduce capital investment.

The spread of the novel coronavirus has pummeled a wide range of industries, and their struggles will likely continue.

Prime Minister Shinzo Abe on May 4 announced that the state of emergency for the entire country would be extended until the end of the month.

After Japan first declared a state of emergency for seven prefectures in April, many department stores closed, with the exception of their food sales floors. Four leading department stores reported sales were down 70 to 80 percent in April, compared with the same month in the previous year.

In the automobile industry, new vehicle sales plummeted by 28.6 percent in April year on year, as the public refrained from going out on the requests of local governments.

Many restaurants and bars have also suspended operations. Those that have stayed open are seeing fewer customers because people are increasingly teleworking or refraining from holding parties.

“Some restaurants and bars expect only a few percent in sales compared with the previous year,” an official of the Japan Foodservice Association said.

Hideo Kumano, chief economist of Dai-ichi Life Research Institute Inc., compared the economic situation to a person drowning.

“When you go under water and hold your breath, the first 30 seconds and the second 30 seconds are quite different in terms of difficulty,” he said. “The stress on the economy is also totally different between the one month so far and the one month ahead.”

He predicts that the prolonged state of emergency will shrink real GDP by 23.1 trillion yen ($216.4 billion) in May, compared with the contraction of 21.9 trillion yen in the previous month.

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