Japan’s economy barely grew in Q4, misses forecasts

Japan's economy barely grew in the fourth quarter of 2023, with official data released on February 14, 2024, showing a GDP increase of just 0.2%, significantly below the 0.5% forecast by economists, due to weak consumer spending and global economic uncertainties. The preliminary data from the Cabinet Office revealed that private consumption, which accounts for more than half of Japan's GDP, increased by only 0.3% during the October-December period, following a contraction in the previous quarter. Business investment also showed modest growth of 0.4%, while exports rose by 0.5%, reflecting some recovery in overseas demand. The disappointing performance comes despite the government's ongoing efforts to stimulate the economy through fiscal measures and the Bank of Japan's accommodative monetary policy. This sluggish growth poses challenges for Prime Minister Fumio Kishida's administration, which has been counting on economic recovery to boost public support ahead of upcoming elections, with economists suggesting that while the Japanese economy avoided technical recession, the underlying momentum remains weak and may influence future policy decisions.