Japan's Q4 GDP Growth Rate at 0.1%... Positive After Two Quarters

Q2 1.0%, Q3 -0.8%
Avoided consecutive negative growth for two quarters

Japan's real gross domestic product (GDP, seasonally adjusted) for the fourth quarter of last year grew by 0.1% compared to the previous quarter. After recording growth rates of 1.0% in the second quarter and -0.8% in the third quarter, Japan succeeded in turning positive after two quarters.

The Cabinet Office of Japan announced on the 11th that the second preliminary estimate (revised figure) of real GDP for the fourth quarter of last year (October to December) was 0.1%, an upward revision from the first preliminary estimate of -0.1% announced last month. Assuming this trend continues for a year (annualized), the annual real GDP growth rate was also revised from -0.4% to 0.4%. Having recorded a real GDP of -0.8% in the third quarter, Japan avoided two consecutive quarters of negative growth.

[Image source=Reuters Yonhap News]

The revised GDP figure is recalculated by reflecting data such as corporate statistics that were produced after the preliminary estimate was announced. The improvement in capital investment, which was recorded at -0.1% in last month's preliminary estimate but improved to a 2.0% increase in the latest statistics, drove the shift to positive real GDP growth.

However, personal consumption, which accounts for more than half of GDP, was revised downward from -0.2% in the first preliminary estimate to -0.3%. The Nihon Keizai Shimbun (Nikkei) pointed out that air conditioners and processed seafood products exerted downward pressure. It also added that mild winter weather led to weakness in the winter clothing sector, and the dining-out industry lost upward momentum due to a pause in economic recovery from the COVID-19 pandemic.