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Japan’s GDP Grew 5.4% in Q4/21 as Consumer Spending Recovered

The Japanese Cabinet Office announced today that gross domestic product (GDP) increased 5.4% year-on-year and 1.3% quarter-on-quarter in 4Q21. The decline in the number of people infected with COVID-19 has helped boost consumer spending.

Japan’s GDP grew in Q4/21 for the first time in two quarters. In 2021 as a whole, GDP grew by 1.7%, the first growth in three years, following a decline of 4.5% in 2020.

The contributing factor to Japan’s fourth-quarter GDP growth was a 2.7% increase in private consumption, with private consumption accounting for more than half of Japan’s GDP.

Capital spending increased by 0.4% in the fourth quarter, while external demand contributed 0.2% to GDP, compared to market expectations of 0.3%.

Japan had already stopped emergency measures to contain the spread of COVID-19 in October last year. Together with the declining number of COVID-19 cases, this contributed to the increase in Japanese consumption by the end of 2021.

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