11 March 2024 – Revisions to official GDP figures released on Monday indicate that Japan’s economy escaped a technical recession despite higher-than-expected fourth-quarter growth that raised questions about the slow pace of economic recovery. Initial predictions were for a 0.4% decrease. However, the Cabinet Office reports that Japan’s revised GDP increased at an annualized speed of 0.4% from the previous quarter in the October–December period.
According to a Cabinet Office official, prawns and home appliances were two factors driving the category’s decline. Due in part to board members’ recent hawkish remarks that Japan was approaching the central bank’s 2% inflation goal, the higher adjustment coincided with rising market anticipation that the Bank of Japan might abandon its zero interest rate policy as early as this month.
“The Bank of Japan tends to put more emphasis on its consumption activity index and doesn’t seem to be particularly concerned about the recent sluggishness in activity,” said Marcel Thieliant. It is planned that the BOJ will convene for two days on March 18–19 to establish policies.
Conclusion
In January, real earnings adjusted for inflation shrank for the 22nd consecutive month in Japan, the world’s fourth-largest economy behind Germany. In the same month, household expenditure fell by the most in 35 months year over year. As with the earlier figure, real GDP was supplied by external demand by 0.2 percentage points.
