global economy

Japan household spending rises as GDP revised up

Agence France-Presse, Agence France-Presse
Japan household spending rises as GDP revised up

MARKET. Customers visit Tsukiji's outer market, or jogai, in Tokyo, Japan, on December 8, 2020.

Photo by Kazuhiro Nogi/AFP

Japan's gross domestic product growth for the 3rd quarter of 2020 is revised to 5.3% from a preliminary estimate of 5%

Japan’s household spending rose for the first time in more than a year but on one-off factors, government data showed Tuesday, December 8, as gross domestic product (GDP) was revised up, confirming the country’s exit from recession.

Household spending in October rose 1.9% year-on-year, with the increase due in part to the government’s controversial domestic tourism campaign, which has been criticized as poorly conceived given the ongoing coronavirus pandemic.

But it was also due to the weakness of spending last October, after a consumption tax hike, making this year’s figures positive by comparison, according to data compiled by the internal affairs ministry.

Meanwhile, the Cabinet Office revised up the GDP figure for the July-September period to 5.3% from a preliminary estimate of 5%, with a decline in corporate investment smaller than had been initially thought.

Japan’s economy exited recession after 3 quarters of contraction, with the revised data also showing the world’s 3rd largest economy shrank 8.2% in Q2, more than the previously estimated 7.9%.

That was the worst figure for Japan since comparable data became available in 1980, exceeding even the brutal impact of the 2008 global financial crisis.

The GDP data will be welcome news for Japan’s government, which has avoided the tough lockdown measures seen in some other countries as it tries to balance preventing the spread of the coronavirus with protecting the economy.

Japan was already struggling with a stagnating economy and the impact of a consumption tax hike implemented last year before the pandemic hit.

It has seen a smaller coronavirus outbreak compared to some of the worst-hit countries, with infections counting slightly more than 162,000 and deaths at around 2,330. – Rappler.com