Record COVID-19 cases in Japan and overseas are increasing the risk of the economy losing recovery momentum and even shrinking again as the spread of infections complicates the government’s plans to support growth.
Lockdowns overseas and renewed concerns over the virus at home already appear to be impacting activity in Japan’s economy, according to PMI data released Friday. The figures showed a faster rate of contraction in both the manufacturing and service sectors.
While the likelihood of a double-dip contraction in Japan still isn’t the main scenario for economists, the outside risk of one is growing as the near-term outlook continues to look far from clear even after encouraging vaccine test results.
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