Asia’s second-largest economy grew 0.2 percent in the October-December period, below expectations.
Japan’s economy recovered at a slower-than-expected pace in the final quarter of 2022, even as the reopening of the country’s borders spurred growth.
Asia’s second-largest economy grew just 0.2% in the October-December period, government data showed on Tuesday, suggesting a slowdown in the global economy could leading to the recovery of the country.
Analysts surveyed by Bloomberg had forecast growth of 0.5% in the final quarter of the year. Japan’s economy unexpectedly contracted in the third quarter as a weak yen and higher import costs hit household and business consumption.
The latest figures show that the world’s third-largest economy grew 1.1% overall in 2022.
Hiroyuki Ueno, senior economist at SuMi TRUST, said in a note before the data was released: “Japan saw moderate growth in the fourth quarter of 2022.
“Consumer services benefited from an increase in domestic tourism and an increase in domestic tourists,” he wrote.
“Exports have recovered, reflecting the easing of supply restrictions on auto-related goods and moves to restore inventories overseas.”
In October, Japan welcomed the return of mass tourism after two and a half years of imposing some of the world’s most severe pandemic travel restrictions.
A record 31.9 million foreign tourists visited Japan in 2019 before the country closed its borders in response to the arrival of COVID-19.
Policymakers are hoping that an increase in domestic consumption will boost wages to help households weather rising food and fuel costs.
December consumer prices in Japan growing at the fastest rate since 1981increase 4 percent annually.
Despite rising inflation, the Bank of Japan (BOJ) went against the international trend of raising interest rates, pursuing an extremely loose monetary policy to boost growth.
Outgoing BOJ Governor Haruhiko Kuroda, who will retire in April, has expressed a desire for an extremely accommodative monetary policy until wages rise significantly.
Mr. Kuroda’s successor is expected to be nominated by Prime Minister Fumio Kishida late Tuesday. Kazuo Ueda, a professor of economics at Kyoritsu Women’s University and a former member of the BOJ’s policy committee, is expected to take up the role.
