Japan’s double-digit expansion signals resilience in economy

Feb 16, 2021 | News On Japan

Feb 16, 2021 (Japan Times) - Japan’s economy clocked another quarter of double-digit growth and finished the pandemic year in better shape than initially expected, signaling potential for a more sure-footed recovery once a damaging state of emergency ends.

Gross domestic product grew an annualized 12.7% from the prior quarter in the three months through December, the Cabinet Office reported Monday. The result was better than 22 of 24 forecasts from surveyed economists and defied a winter surge of the coronavirus.

The fourth-quarter expansion helped the economy survive the pandemic year with a 4.8% contraction, better than forecast by economists and a smaller hit than the 5.7% drop in 2009 following the global financial crisis.

Surging trade and gains in household spending continued to lift growth. The fourth quarter also saw businesses ramping up investment again, with outlays by firms increasing at the fastest pace in more than five years.

More spending by firms, after six months of pullback, suggests corporate Japan now sees better prospects ahead once the country ends a state of emergency that is forecast to drive the economy back into a bruising contraction this quarter.

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