Even with a record stimulus package, Japan’s economy is heading toward a record contraction of 25 percent this quarter after Prime Minister Shinzo Abe declared a state of emergency in Tokyo, Osaka and some other parts of the country, according to Goldman Sachs.

The call to stay at home, while not legally binding, will also push down consumer spending by 25 percent on an annualized quarter-on-quarter basis and further reduce business spending, Goldman Sachs economists Naohiko Baba and Yuriko Tanaka wrote in a note Wednesday. They also see exports plunging 60% in the quarter.

The forecast is the latest dismal assessment of the hit the nation’s economy will take as activity is scaled back due to the virus pandemic, with the emergency declaration covering almost half of the nation’s output.

The measures in Japan are of a different dimension from the lockdowns imposed in Europe and the U.S., given that most don’t carry legal force and with public transport, financial services and food stores continuing, the economists said.

"However, we expect the explicit declaration of a state of emergency to meaningfully change the behavior of individuals, business owners and event organizers,” they wrote. “We expect a change in how people act, including stepped-up business suspensions and people refraining significantly more from activities outside the home.”

While Abe’s stimulus package of ¥108 trillion was far larger than a set of measures introduced 11 years ago during the global financial crisis, they said the direct boost to the economy would be closer to ¥14 trillion.