TOKYO - Japan’s real gross domestic product (GDP) for the October–December period posted an annualized increase of 0.2%, marking the first growth in two quarters, though the recovery remains weak.
The slight return to positive growth suggests the impact of Trump-era tariffs has eased, but the outlook for the Japanese economy remains far from optimistic.
GDP grew at an annualized 0.2% in the October–December quarter, returning to positive territory for the first time in two quarters, driven in part by an increase in capital investment amid a worsening labor shortage.
However, private consumption, which accounts for more than half of GDP, rose only 0.1%, continuing to hover at low levels.
Persistently high food prices appear to be reinforcing consumers’ frugal mindset, underscoring ongoing caution in household spending.
Chief Cabinet Secretary Minoru Kihara said, "Based on the idea of responsible proactive fiscal policy, we intend to increase employment and income and achieve a strong economy."
The government plans to convene a national council as soon as possible to discuss measures such as a two-year consumption tax cut on food products, though some question whether such steps will be effective in addressing rising prices.
To boost consumption, a sustained cycle of wage growth and stable price increases will be necessary, raising questions about whether the Takaichi administration can implement policies with a long-term perspective.
Source: TBS
