Japan’s economy grew last quarter on better spending and exports

TOKYO (AP) — Japan’s economy grew at an annual rate of 5.4% in October-December, boosted by improving consumer spending and exports, the government said Tuesday.

On a quarterly basis, Japan’s real gross domestic product, or GDP, which measures the value of a country’s goods and services, rose 1.3% in the last three months of the year, the data showed. of the Cabinet Office.

Growth was boosted after measures to curb the spread of coronavirus infections were lifted last year. The restrictions called for restaurants and bars to close early and large-scale events had to be canceled or held with limited crowds.

The latter part of last year had seen people start to travel again and go out to eat and shop. But the future remains uncertain after Tokyo and other parts of Japan resumed pandemic precautions as cases rebounded with the omicron variant.

For 2021, the world’s third-largest economy recorded 1.7% growth, marking its first calendar year of expansion in three years. The economy had contracted at an annual rate of 2.7% in July-September and had grown by 2.4% in April-June.

The annual figures show how the economy would have grown if the quarterly rate were to hold for a year.

Domestic demand rose 1.1% on healthy consumer spending in the last quarter. Exports also increased as the recovery gathered pace in other economies.

Takayuki Toji, economist at SuMi TRUST, said the latest data shows a strong recovery, supported by consumer and business spending, rising exports and a recovery in manufacturing, mainly in the auto industry.

This could be short-lived due to shortages of semiconductors, raw materials and other inputs that plague many industries.

However, if the wave of omicron cases subsides relatively quickly, as it has in many places, the economy will suffer only a temporary setback, said Tom Learmouth of Capital Economics.

“While Omicron will have the Japanese economy just treading water this quarter after a rebound in the fourth quarter, production should soon resume its recovery and return to its pre-virus trend by the end of the year,” he said in a report.


Yuri Kageyama is on Twitter: https://twitter.com/yurikageyama

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