In the three months ending in December, Japan’s real gross domestic product increased by 0.2% annually, the Cabinet Office reported on Monday. That fell short of the median growth prediction of 1.6% made by economists.
According to a Bloomberg report, families continue to contend with inflation that remained above the Bank of Japan’s 2% objective for four years through 2025. Consumer expenditure, the largest contributor to GDP, increased by 0.1%, demonstrating the fragility of domestic demand. Spending on capital increased by 0.2%.
Also Read: Explained: How China’s ‘unruly’ trading may be shaking up the global gold marketFollowing a third-quarter rout due to regulatory changes, private housing investment increased 4.8% in real terms from the previous quarter, as was to be expected.
For a large portion of 2025, inbound tourism—which the data counts as service exports—assisted, but more recently, it suffered. Following Takaichi’s divisive remarks on Taiwan in November, Beijing issued a travel warning against visiting Japan, which caused a sharp decline in Chinese tourists.
Despite the fact that exports alone increased each month in the fourth quarter, net exports did not contribute to growth in the most recent quarter.
The data released on Monday highlights how erratic the economic recovery is and how it lacks a compelling catalyst other than isolated events.
The BOJ is still expected to raise the benchmark interest rate later this year despite the indications of muted activity.
(Edited by : Juviraj Anchil)
