The Japanese economy grew less than expected

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Gross domestic product (GDP) of the world’s third-largest economy, ahead of Germany, rose 0.1 percent year-on-year, according to revised government data from Thursday. The official statisticians had initially calculated an increase of 0.6 percent. The reason for the downward correction is that the citizens of the Far Eastern archipelago were reluctant to increase spending due to rising inflation.

Relief measures for households

Although inflation in Japan is lower than in other major economies, it is high by Japanese standards. In the last quarter of last year, the Japanese economy recovered from an unexpected downturn in the previous three months. Compared to the previous quarter, however, it grew by just under 0.02 percent instead of the initially calculated 0.2 percent. Private consumption, which in Japan contributes about 60 percent to the country’s economic output, rose by 0.3 percent instead of the 0.5 percent initially expected.

The government in Tokyo is therefore considering further support measures for households, which should dampen official inflation figures. However, the central bank takes the view that the price increases are not sustainable. Therefore, inflationary pressures are expected to ease later in the year. Against this background, the central bank is sticking to its aggressively relaxed monetary policy. The nominated new governor of the central bank, Kazuo Ueda, is also likely to stick to this course.

(SDA)

Source: Blick