Japan’s Economy Stalls as Exports Decline
Japan’s economy grew a sluggish 0.2% annually last quarter, with 2025’s growth projected at only 1.1%. Private consumption increased at an annualized rate of 0.4 percent in the October-December period; however, this was counterbalanced by a 1.1 percent decline in exports, according to the latest seasonally adjusted preliminary data. Japan’s export-reliant economy has faced challenges due to President Donald Trump’s tariffs, yet it has been expanding at a sluggish rate for years.
Prime Minister Sanae Takaichi is anticipated to implement measures aimed at revitalizing the economy following a decisive win in a general election earlier this month. Takaichi has pledged to increase spending and to suspend Japan’s sales tax on food, among other initiatives. Japan’s GDP experienced a contraction of 0.7 per cent in the July-September quarter, following a growth of 0.5 per cent in the April-June period. With the economy rebounding in the most recent quarter, the nation has narrowly sidestepped a technical recession, defined as two consecutive quarters of contraction.
The Cabinet Office reported that the economy experienced a growth of 0.1 per cent on a quarterly basis from October to December. The 1.1 per cent expansion last year marked the fastest growth since 2022, a period when Japan was rebounding from the disruptions brought about by the Covid-19 pandemic. The government is forecasting that the economy will grow at an average rate of approximately 0.6 per cent in the near term.
