Japan’s October-December GDP growth projected at annual 5.6%

Japan’s real gross domestic product in October-December last year is estimated to have grown 1.4% from the previous quarter on average, for an annualized rise of 5.6%, according to forecasts by 11 private-sector think tanks.

Amid a decline in the number of new coronavirus cases in the final quarter of 2021, personal spending is estimated to have grown 2.2% after sinking in the previous quarter.

With the fourth coronavirus state of emergency fully lifted at the end of September, spending in the service sector, such as in the restaurant, hotel and entertainment industries, is believed to have recovered sharply from the severe slump in summer, the Dai-ichi Life Research Institute said.

New auto sales also picked up, thanks to an upturn in vehicle output following a steep drop amid semiconductor shortages and supply chain bottlenecks caused by the coronavirus surge.

Exports are projected to have risen 0.4%, chiefly pushed up by growth in vehicle demand from abroad. Corporate capital spending’s increase was put at 0.6%.

Meanwhile, GDP growth in price-adjusted real terms would decelerate to around 1.0% in January-March this year due to the explosive spread of the omicron coronavirus variant, the NLI Research Institute said, adding that “negative growth would be likely if COVID-19 restrictions are tightened further with, among others, the government’s declaration of a state of emergency again.”