TOKYO – Japan’s economy grew at an annual pace of 5.4% in October-December, boosted by improved 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 nation’s products and services, grew 1.3% in the last three months of the year, according to Cabinet Office data.
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Growth got a boost after measures to curb the spread of coronavirus infections were lifted last year. The restrictions asked restaurants and bars to close early and large-scale events to be canceled or held with limited crowds.
The latter part of last year had seen people starting to travel again, and venture out for dining and shopping. But the future remains uncertain after Tokyo and other areas of Japan resumed pandemic precautions as cases have rebounded with the omicron variant.
For 2021, the world’s third-largest economy grew 1.7%, marking its first calendar year expansion in three years. The economy had contracted at a 2.7% annual rate in July-September and expanded 2.4% in April-June.
The annual numbers show how the economy would have grown if the quarterly rate were to continue for a year.
Domestic demand grew 1.1% on the back of healthy consumer spending in the last quarter. Exports also grew as recoveries in other economies took off.
Takayuki Toji, an economist at SuMi TRUST, said the latest data show a strong recovery, supported by consumer and business spending, the uptick in exports and a recovery in manufacturing, mainly in the auto industry.
That may be short-lived due to shortages of semiconductors, raw materials and other inputs that are plaguing 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 cause Japan’s economy to only tread water this quarter following a rebound in Q4, output should soon resume its recovery and get back on its pre-virus trend by the end of the year," he said in a report.
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Yuri Kageyama is on Twitter: https://twitter.com/yurikageyama