TOKYO (AP) – Japan’s economy grew at an annual rate of 12.7% in October-December, marking the second straight quarter of growth, amid overcoming the downturn caused by the coronavirus pandemic, which according to government data released Monday.
The world’s third-largest economy saw growth in spending, government spending and exports for the last quarter of last year, compared to the previous quarter, the Cabinet Office said.
Japan’s seasonally adjusted gross domestic product had grown at a staggering annual rate of 22.9% in the July-September period.
GDP is the sum of the sum of the country’s goods and services. The annual rate shows what the increase or decrease would have been if that same rate had continued for a year.
Expectations for the future are broadly emerging, with trade starting, and the spread of vaccines in countries that are major trading partners in Japan, such as the US and other Asian countries.
For the calendar year 2020, Japan’s economy sank 4.8%, the first year of a recession in 11 years. On a quarter, the economy grew 3% in October-December, according to preliminary data.
Japan had never locked out for COVID-19, trying to maintain business activity while encouraging work from home and social distance.
A so-called emergency situation, based around restaurants and other businesses being used near 8pm, is used in Tokyo and some other urban areas where infectious gatherings have emerged.
Junichi Makino, chief economist of SMBC Nikko Securities, said that while the first quarter of this year may see a halt, due to a state of crisis, a path is expected to gradually recover as overseas economies return normally and the crisis ends next month.
“With the looming coronavirus outbreak, the end of the crisis and the spread of the vaccine, Japan’s economy is expected to start recovering, returning to normal, starting from the fourth April-June , ”Said Makino.
Japan still faces the biggest overall economic problems, such as falling wages and a decline in international competitiveness, which has led to stagnation in recent decades.
Social changes that would take time would be needed to rectify these problems, such as encouraging foreign investment and positioning education to nurture entrepreneurship.
Naoya Oshikubo, senior economist at SuMi TRUST, or Sumitomo Mitsui Trust Fund Management, notes an element of “revenge spending” seen in GDP data.
That means that buyers try to make up for “wasted time” by buying more, because they had to stay at home and did not buy as much for long periods because of the pandemic, he said.
Government programs have helped boost spending, including last year’s “GoTo” discount campaign, which has been in short supply while coronavirus cases have been compliant as well as helping with GDP. Data also showed a recovery in machine investments.
Vaccine distribution has not yet begun in Japan but is expected to begin this week with medical staff. Japan, with approximately 6,900 COVID-19 deaths, has seen far fewer deaths than in the U.S. and some other countries.
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Yuri Kageyama is on Twitter https://twitter.com/yurikageyama