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.