Slow Vaccine Rollout and COVID-19 Outbreak to Slows Japan Q3 Economic Growth

Analysts forecast slower growth for Japan’s economy in the third quarter as vaccination remains slow amid the new spike in COVID-19 cases.

Japan is expected to experience a 2.7 percent growth in July to September, only half of the 4.8 percent prediction in June.

Japan’s vaccine rollout, the slowest among the G-7 countries, was pointed as a key factor. At its current rate, private consumption’s expected recovery will further be delayed amid new COVID-19 variants.

Prime Minister Yoshihide Suga pledged to achieve herd immunity by the end of September as more people begin to complain about repeated lockdown restrictions.

Japan has only fully inoculated 36.8 percent of its population, majorly composed of the elderly. The fresh wave of delta variant infections has since been found on those in their 20s and 30s.

Harumi Taguchi, economist at IHS Markit, noted that recovery will be seen in the fourth quarter only after 60 percent of the population have been vaccinated.

“The problem is that the government hasn’t given a clear signal about what vaccination rate will enable what specific economic activities to resume. So people don’t see the incentive to get vaccinated,” Taguchi lamented.

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