Japan in Recession.
London, 15 February 2024
Following a revised 0.8% decline in Q3, and missing market estimates of a 0.3% gain, Japan's GDP unexpectedly contracted 0.1% quarter over quarter in Q4 of 2023, according to flash data.
Due to persistent global headwinds and high cost pressure, private consumption—which makes up over half of the economy—declined for the third consecutive quarter, sending the economy into a recession for the first time in five years (-0.2% vs. -0.3% in Q3). Simultaneously, public investment fell even more (-0.7% versus -1.0%), while capital expenditures were restrained (-0.1% vs -0.6%).
Concurrently, government spending decreased by 0.1% following an increase of 0.3% in the previous quarter. Positively, net trade increased as a result of better export growth (2.6% vs. 0.9%) and stronger import growth (1.7% vs. 1.0%).
Forecast
In comparison to the previous quarter, Japan's GDP shrank by 0.10 percent in the fourth quarter of 2023. By the end of this quarter, analysts and Trading Economics global macro models predict Japan's GDP Growth Rate will be 1.50 percent. Their econometric models predict that the Japan GDP Growth Rate will generally trend around 0.40 percent in 2025. Source: Trading Economics