The easing of Covid-19 restrictions boosted consumer spending and Japan’s economy recovered in the last three months of 2021, although the gains were less drastic than in the US or Europe.
Japan’s gross domestic product grew 5.4% year-on-year in the October-December period, according to figures released Tuesday by the cabinet office. Analyst consensus polled by Reuters is expected at 5.8%.
But analysts warn that the recovery momentum may be lost after December, as the Omicron variant of the coronavirus begins to take hold, the yen falls and rising oil prices begin to weigh on the sub-par Japanese economy. dependent on energy and food imports.
On a quarterly basis, Japan’s economy recovered 1.3% after contracting 0.7% in the July-September period.
Consumer spending, which accounts for more than half of Japan’s GDP, grew 2.7%, as the restaurant, entertainment and tourism sectors benefited from a previously very low rate of new Covid-19 infections.
This figure has risen to a higher level than in the last three months of 2019. For the whole of 2021, the country’s economy grew by 1.7%, turning positive for the first time in three years.
“Omicron has since taken the wind out of the economy’s sails,” said Tom Learmouth, Japan economist at Capital Economics. “But with daily cases now dropping and booster deployments finally picking up speed, good winds should return in the second quarter.”
Assuming no worrying new variation emerges, we expect GDP to grow 1.5% quarter-on-quarter in the second quarter and another 1% in the third quarter to bring the economy back to normal, he added. back to the way it was before – the path of the pandemic. ”