Japan's annual gross domestic product (GDP) reached 508 trillion yen in the third quarter of this year, equivalent to US$4.85 trillion, recovering a little more than half of the losses suffered during the epidemic, according to preliminary statistics released by the Cabinet Office on the 16th. After deducting price factors, Japan's real gross domestic product grew by 5.0% in the third quarter from the previous quarter, or 21.4% at an annual rate, the first positive growth in four quarters. But real GDP fell 5.8% compared with the same period in 2019. Japan's once-stagnant economic activity is gradually returning, with the economic growth rate in the third quarter hit a new high since 1980 under current standards. Kyodo news analysis said that the economic growth in the third quarter could not make up for the 28.8% annual decline in the economy in the second quarter. Last year's increase in the consumption tax was followed by the first COVID-19 outbreak, causing the Japanese economy to contract for three consecutive quarters. However, the strong economic growth has only partially reversed that decline, and economists believe it will take years to recover the lost. A surge in confirmed COVID-19 cases at home and abroad could weigh heavily on the economic recovery this quarter. Capital spending fell 3.4% in the third quarter, the second consecutive quarter of decline, indicating that uncertainty over the impact of the epidemic is weighing on business confidence. Japan has so far announced two stimulus packages totaling US$2.2 trillion, including cash handouts to households and loans to small businesses, to alleviate the COVID-19 crisis. While Japan's economy has improved in recent months, it is expected to experience a 5.6% recession by the end of the current fiscal year ended in March 2021 and could take years to return to pre-COVID-19 levels, analysts said.