Japan's Economic Growth Rate at 1.7% Last Year... Positive Growth Recorded for the First Time in 3 Years

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The Japanese economy has returned to positive growth for the first time in three years. After experiencing negative growth due to the COVID-19 pandemic, Japan's economy is showing signs of recovery driven by personal consumption and export rebounds.

According to NHK and other sources on the 15th, the Japanese Cabinet Office announced that last year's real Gross Domestic Product (GDP) increased by 1.7% (preliminary figure) compared to the previous year. Japan's real GDP recorded negative growth for two consecutive years, with -0.2% in 2019 and -4.5% in 2020.

Looking at the quarterly growth rates last year, the figures were -0.5% in Q1, 0.6% in Q2, -0.7% in Q3, and 1.3% in Q4, showing significant fluctuations in economic trends. Regarding the contribution to the annual growth rate increase, domestic demand accounted for 0.7 percentage points, while other factors made up 1.0 percentage points. Personal consumption rose by 1.4%, and exports increased by 11.6%, both turning positive from the negative figures recorded in 2020.

NHK analyzed that the real GDP for the fourth quarter (October to December) last year, when annualized, rose by 5.4%, returning to positive growth after two quarters, attributing this mainly to the revival of personal consumption. In fact, during Q4, demand for services such as dining out and accommodation increased, showing a recovery in personal consumption. Durable goods like automobiles and semi-durable goods such as clothing also showed growth trends.

Nihon Keizai reported, "With the continued spread of the Omicron variant this year, the Japanese government has been requesting various local governments to respond since January, and the economy is expected to contract again."

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