Japan’s Recession is Over

Here’s the silver lining from Japan’s latest economic data: The recession is over.  But that’s where the good news ends for Asia’s second-largest economy, which remains stuck in neutral despite the best efforts of Prime Minister Shinzo Abe to deliver a revival.

Gross domestic product grew by an annualized 2.2% in the three months ended December, Japan’s Cabinet Office said Monday. The result was much worse than the 3.6% expansion forecast by economists.  The economy grew by 0.6% compared to the previous quarter, but was held back by weaker than expected private consumption.

The lackluster expansion follows two consecutive quarters of negative growth for Japan — the definition of a recession — precipitated by a sales tax hike that took a huge bite out of consumer spending.  The results are likely to fuel critics of “Abenomics,” the economic plan championed by Abe. The strategy — a massive bond-buying campaign coupled with structural reforms and stimulus from the central government — has largely failed to lift wages, or dramatically boost growth.

CNN

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.