Govt believes economy bottomed out in May 2020

The government is set to officially recognize that Japan’s recession phase, which began in November 2018, ended in May 2020. It will soon convene a working group panel on Indexes of Business Conditions, which comprises experts, after which the Cabinet Office will make an official judgment based on the outcome of the panel’s discussions.

Japan supposedly hit the bottom of an economic trough — at which point business conditions shifted from contraction to expansion — in May 2020. This was during a period when novel coronavirus cases had been on the rise and the first state of emergency had been declared across the nation.

Under the emergency declaration, people were advised to stay indoors to prevent the spread of infections, leading to sluggish consumption and production, which rapidly slowed economic activities.

Therefore, the government will likely determine that May 2020 saw the bottom of the economic trough.

The government also convened the experts panel in July last year. At the time, the government made an interim judgment that the previous economic peak, at which business conditions shifted from an expanding phase to a recession phase, was in October 2018.