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May 18, 2021JAPAN GDP 2021 Q1 (FIRST PRELIMINARY) 
The Japanese economy contracted in the first quarter of 2021, posting a revised seasonally adjusted annualized decline of 5.1%. The contraction in Q1 followed gains of 11.6% in Q4 2020 and 22.9% in Q3 2020. Renewed emergency measures to combat additional outbreaks of COVID-19 were implemented in Q1. Japan's real GDP remains 2.3% smaller in Q1 2021 than it was at the pre-pandemic period (Q4 2019).
In Q1 2021, only residential investment and rising exports contributed to growth. Household and government spending were down as were public and non-residential investment. Imports continued to grow.
Japan's nominal GDP declined by 6.3% (seasonally adjusted annualized rate) in Q1 2021.
A seasonally adjusted annualized rate shows what the percent change would be if the quarterly rate continued for a full year, by compounding the quarterly rate four times. Reporting annualized rates facilitates comparability between annual and quarterly growth but can exaggerate change when series are volatile. The COVID-19 shock does not indicate an decline of Japan's GDP by 5.1%. It would take four quarters of compounded growth at the same pace as reported in Q1 to reduce Japan's GDP by 5.1%.
Cabinet Office of Japan: Quarterly Estimates of GDP
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