Japan’s economy expanded at a slower rate than earlier estimates in the final quarter of last year, according to revised figures from the Cabinet Office. The country’s Gross Domestic Product (GDP) grew by 2.2% on an annualized basis between October and December, lower than the initial estimate of 2.8%. This means that, when adjusted for inflation, the economy grew by only 0.6% compared to the previous quarter, slightly down from the 0.7% increase reported in February.
The primary reason for this downward revision was weaker-than-expected consumer spending. Rising prices put pressure on household budgets, leading to lower-than-anticipated consumption, which slowed overall economic growth.
Despite the revision, economists believe this slight change will not significantly affect public sentiment regarding Japan’s economic situation. Kazutaka Maeda, an economist at the Meiji Yasuda Research Institute, noted that the update does not introduce any major shifts that would alter people’s perceptions of the economy.
Additionally, the slower growth is not expected to impact the Bank of Japan’s (BOJ) monetary policy decisions. Many analysts still anticipate that the BOJ will move forward with plans to raise interest rates in the near future.
In January, Japan posted a current account Deficit of 257.6 billion yen, the first in two years, as import costs rose due to a weak yen and stockpiling ahead of the Lunar New Year. Although exports saw a slight increase, the trade deficit widened. However, the country experienced a boost in tourism and foreign investment.
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