Japan’s economy booked double-digit growth in the last quarter of 2020, the second quarter in a row, continuing to recover strongly following a historic recession, a government report showed on Monday.
The economy grew at an annualized rate of 12.7 per cent in the October-to-December period, beating the median forecast of 9.4-per-cent growth by analysts.
The survey carried out by the Nikkei Business Daily, comes after an annualized 22.7-per-cent expansion in the third quarter.
In 2020, the economy shrank by 4.8 per cent due to a tax hike and the Covid-19 pandemic, marking the first contraction in 11 years, according to the Cabinet Office.
Economic Revitalization Minister Yasutoshi Nishimura said the 2020 GDP figure reflected “the very severe situation,” while the reading in the October-to-December quarter showed a “bottoming out and the potential resilience of Japan’s economy.”
However, analysts expect the economy to contract once again in the first quarter of this year as Japan has had a coronavirus state of emergency in place in 10 prefectures, including Tokyo and Osaka, since early January.
The government requested that residents in the regions refrain from unnecessary outings and that bars and restaurants close by 8 pm (1100 GMT).
In the October-to-December period, private consumption rose 2.2 per cent quarter-on-quarter following a 5.1-per-cent increase in the previous quarter.
On the other hand, corporate investment grew 4.5 per cent – the first growth in three quarters, the Cabinet Office said in a statement.
Exports surged 11.1 per cent in the quarter following a 7.4-per-cent rise in the third quarter, while imports rose 4.1 per cent, marking the first increase in second quarters.
The government launched a travel promotion campaign in July to reinvigorate local economies and the tourism industry hit hard by the pandemic. But it was suspended in late December following a resurgence of infections.
In the second quarter of 2020, as the pandemic and a consumption tax increase from late 2019 hit, Japan’s economy shrank by a record annualized 29.3 per cent for the third straight quarterly contraction.