The increase was driven largely by a 2.2% rise in private consumption, which accounts for more than half of Japan’s GDP, a poll showed
Japan’s economy likely rebounded in the final three months of 2021 as consumption rose during a drop off in COVID-19 cases, a Reuters poll showed, though it could slide back into contraction this quarter after a spike in Omicron variant infections.
The poll also showed wholesale prices continued to rise in January from a year earlier, a sign higher energy and raw material costs will keep eroding corporate profits.
The world’s third-largest economy likely grew an annualised 5.8% in October-December, rebounding from a 3.6% contraction in the third quarter, according to a median forecast of 18 economists polled by Reuters.
The increase was driven largely by a 2.2% rise in private consumption, which accounts for more than half of Japan’s gross domestic product (GDP), the poll showed.
Capital expenditure likely gained 0.5%, while external demand added 0.3% point to GDP growth in October-December after neither adding nor shaving off the previous quarter’s figures, the poll showed.
Japan’s economy clearly turned up in October-December, as foot traffic recovered thanks to the lifting of COVID-19 curbs and falling infection cases, said economists at SMBC Nikko Securities.
Separate data will likely show wholesale prices rose 8.2% in January from a year earlier, slowing for the second straight month but still hovering near the record 9.0% hit in November, the poll showed.
Household spending likely rose 0.3% in December from a year earlier, marking the first rise in five months, the poll showed.
The government will release preliminary October-December GDP data on Feb. 15 and household spending data on Feb. 8.
The Bank of Japan will release the wholesale price data on Feb. 10.