Feb 15 (Japan Times) - Japan’s economy rebounded in the final three months of 2021 as falling coronavirus cases helped prop up consumption, though rising raw material costs and a spike in new omicron variant infections cloud the outlook.
Some analysts expect the economy to contract again in the current quarter as rising COVID-19 cases and supply chain disruptions hit factory output, heightening challenges for policymakers in sustaining a fragile recovery.
The world’s third-largest economy expanded an annualized 5.4% in the October-December quarter after contracting a revised 2.7% in the previous quarter, government data showed Tuesday, falling short of a median market forecast for a 5.8% gain.
The increase was driven largely by a 2.7% quarter-on-quarter rise in private consumption, which accounts for more than half of Japan’s gross domestic product. The expansion compared with market forecasts of a 2.2% gain.
“The data confirmed a consumption-led rebound in the final quarter as COVID-19 curbs were lifted,” said Takeshi Minami, chief economist at Norinchukin Research Institute.
But the recovery could be short-lived as a surge in COVID-19 cases driven by the omicron variant and geopolitical risks over Ukraine are likely to be drags on growth, Minami added.
“The economy will likely stall in January-March or it could even contract, depending on how the omicron variant may affect service-sector consumption.” ...continue reading
Source: ANNnewsCH
