Prime Minister Shigeru Ishiba recently took a photo with his new Cabinet members in Tokyo, signifying the start of their tenure. The economy of Japan experienced a modest 0.9% growth in the July-September period, with consumer spending playing a significant role in driving this expansion, as indicated by government data released on Friday. This growth followed a 0.2% expansion in the fiscal second quarter, presenting a consecutive quarter of positive economic performance after a 0.5% growth recorded in April-June.
The Gross Domestic Product (GDP) of Japan, the world's fourth-largest economy, is a measure of the value of its goods and services produced. Amidst the modest growth, domestic demand demonstrated resilience, growing at an annualized rate of 2.5%, with private consumption – a major contributor to Japan's GDP – expanding by 3.6%. This growth in household consumption was supported by recent improvements in wages and employment, although spending was slightly lower due to adverse weather conditions affecting some factory operations. The recent income tax reductions also played a role in stimulating spending.
Furthermore, exports in Japan increased by 1.5%, benefiting from a weaker yen that makes Japanese products more competitive internationally. While the weakening yen is advantageous for exports, the impact was somewhat constrained in the latest quarter compared to previous periods. Additionally, the government is optimistic about the gradual growth of the economy, linked to positive developments in overseas markets. However, the economy's recent history includes periods of contraction, such as the 0.6% decline in the January-March quarter, emphasizing the ongoing challenges and fluctuations Japan faces in sustaining growth.