Japan: growth lowered to 4Q and consumption at half mast in January - France 24

Tokyo (AFP)

Japan's economic growth in the fourth quarter of 2020 was revised down slightly to 2.8% over one quarter from 3% in a first estimate in mid-February, and household consumption fell back in January, according to statistics published Tuesday.

The consensus of economists polled by the Bloomberg agency expected GDP growth to remain unchanged from the initial estimate.

The revision is mainly explained by a recovery in the growth of investments (excluding land) of companies that is slightly lower than during the first assessment, to 4.3% over a quarter against 4.5% initially, according to data from the government.

But the growth in household consumption was unchanged from last month's first estimate (2.2%), as was the jump in exports (11.1%).

The contraction of the national economy over the whole of 2020 is also unchanged (-4.8%).

Japanese GDP sank in the second quarter (-8.3%) under the effect of a first state of emergency implemented in the country in the face of the pandemic, before resuming vigorously in the third quarter (+5, 3%).

Even though the lights are green for all of 2021, the return of a state of emergency in much of Japan earlier this year is expected to significantly slow growth in the first quarter, if not cause a brief contraction.

Japanese household consumption, an important component of GDP, thus plummeted in January (-6.1% over one year).

The Bloomberg consensus expected a much less severe drop (-2.1%), after a decline limited to 0.6% in December.

On a smaller scale than the first state of emergency in April-May 2020, which saw the temporary closure of many shops, the present device consists mainly of asking bars and restaurants to close at 8:00 p.m.

But the state of emergency was extended last Friday for Tokyo and its suburbs until March 21, an area representing about a third of the national GDP.

Smaller bonuses for employees at the end of last year also weighed on the purchasing power of households in January, as did the suspension since the end of December of a government program subsidizing travel within the country.

Spending by Japanese households in January fell above all in clothing, culture and leisure.

However, they have jumped in furniture, while the Japanese under a state of emergency are asked to avoid non-essential travel.

© 2021 AFP