TOKYO (BLOOMBERG) - Japanese Prime Minister Shinzo Abe said the country must try to avoid declaring another emergency, in order to soften the blow to the economy caused by the coronavirus pandemic.

Private-sector economists expect gross domestic product to have fallen by more than 20 per cent in the April-June quarter, he told reporters in the south-western city of Nagasaki. That would be a worse hit than the financial crisis, which caused more than a million people to lose their jobs, Mr Abe added.

"Considering the effect on employment and livelihoods, we must do all we can to avoid re-issuing the declaration, while controlling the infection as far as possible," he said. Under a state of emergency declared in April, many businesses closed and people were urged to stay at home.

The central government hasn't issued a blanket request that people avoid travel over the traditional Obon holidays this month, even as some regional governors declare their own emergencies, or urge residents to stay put.

Mr Abe said the government would provide two trillion yen (S$26 billion) in aid for virus-hit hospitals, and that more would be available if needed.

Many of Japan's privately run medical facilities have been hit hard by the pandemic, and the government fears that widespread bankruptcies would make it impossible to deal with any sudden increase in coronavirus patients, the Yomiuri newspaper said earlier on Sunday (Aug 9).

Hospitals that are accepting Covid-19 patients have had to cut back on other services, reducing their income. Even those that don't treat the coronavirus are seeing a fall-off in consultations, as many people avoid enclosed spaces for fear of infection.

While Japan's data has been called into question because of limited testing, the Ministry of Health, Labour and Welfare had recorded 1,039 total deaths from the virus as of Saturday - a figure the US often reaches in a day.