Japan’s Economy in Emergency Set to Shrink 25%, Goldman Says

Even with a record stimulus package, Japan’s economy is heading toward a record contraction of 25% this quarter following Prime Minister Shinzo Abe’s declaration of 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% 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.