TOKYO -- First-quarter data from major economies has underscored how the response to the coronavirus pandemic can make the difference between fiscal growth and malaise.
The U.S. economy has expanded for three straight quarters through March while China logged four consecutive quarters of growth. China contained its coronavirus epidemic earlier than other major countries, and the U.S. has reaped dividends from its stimulus payments and vaccine rollout.
Japan, on the other hand, saw its economy contract for the first time in three quarters in January-March due to the effects of the emergency declaration. Although the European economy has declined for two quarters in a row, the region is expected to surge in the current quarter.
Preliminary numbers released Tuesday show the Japan's real gross domestic product contracting 5.1% in the January-March quarter from the prior three months in annualized terms. The change stems from the second state of emergency declared for Tokyo and three surrounding prefectures on Jan. 8.
Because less people traveled and restaurant hours were shortened, consumer spending dropped 1.4% in that quarter. Capital expenditures receded 1.4%, the first decline in two quarters. Growth in exports became softer compared with the previous quarter.
In the U.S., the economy grew 6.4% annualized in the first quarter. Stimulus checks and confidence instilled by the vaccine rollout boosted consumer spending 10.7%. Economic recovery is expected to persist largely due to the buoyant effect of government spending.
China's economy edged up 0.6% in the first quarter from the previous quarter, or 2.4% in annualized terms, according to Japanese government data. Exports, along with investment and other business activities, have been robust.
The eurozone economy contracted 2.5% annualized in January-March, during which the spread of coronavirus variants forced a series of lockdowns.
The British economy shrank 5.9%, marking the first contraction in three quarters. The government has stepped up its coronavirus response with lockdowns and other measures since December, undercutting private consumption.
However, the vaccine rollout that had been slow to pick up in Europe has been gaining ground, especially in Germany. It is highly anticipated that the eurozone will head toward a significant economic recovery from the second quarter.
The U.K. has administered at least one shot to more than half the population as of Sunday. The lockdown has been lifted in phases since March, and there is a strong chance the national economy will bounce back in the second quarter.
The disparities in economic growth of Japan compared with that of the U.S., China and Europe will become more obvious in the second quarter, according to 10 private-sector economists surveyed by Nikkei. The average forecasts predict a 9.7% GDP growth for the U.S. due to massive government spending by President Joe Biden's administration on top of widespread vaccinations.
The EU is expected to stage a 7% recovery in second quarter. But Japan's economic growth anticipated to be mired at 1.7% due mainly to lackluster consumer spending.
By the second quarter, the U.S. will join China in lifting the economy to pre-COVID levels, according to a measure that places the 2019 fourth quarter GDP at the baseline of 100. China will be first at 108 in the April-June period while the U.S. will be at second with 101. The Eurozone will score 98 while Japan will come in last among the four economies at 96.