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Japan’s GDP rebounded before the Omicron wave hit

Tokyo: Data showed yesterday that the Japanese economy recovered in late 2021, with fewer virus cases, less regulation, and a surge in demand before the Omicron wave hit the country.

The world’s third-largest economy has grown 1.3% in the three months to December, recovering from a 0.7% reduction in the last three months due to a surge in virus cases. Quarterly figures released by the Japanese Cabinet Office on Tuesday were slightly below market expectations of 1.5%, driven by a sharp recovery in spending after the emergency virus deregulation was lifted in October.

The data also showed that the economy grew by 1.7% in real terms in 2021. This is the first economic growth in three years. After a surge in virus cases in the summer of 2021, when Japan hosted the Olympics virtually without spectators, the government lifted regulations in October, increasing personal consumption by 2.7% quarter-on-quarter.

However, it is unlikely that growth will continue as the wave of the Omicron incident spurred new limits in January. Targeted primarily at nightlife, restrictions that are far less stringent than a total blockade will be enforced until early March.

Masamichi Adachi, chief economist at UBS Securities, said Japan “has suffered more than expected from the Omicron variant.” “Consumer self-control is greater than expected and the pace of boosters is very slow,” he said prior to the release of the latest data.

“The damage caused by Omicron does not seem to be as serious as the world economy fears, but Japan may be an exception,” Adachi told AFP. “Still, after disappointing the stagnation in 2021, we expect the Japanese economy to resume a solid recovery this year,” he added. “The timing of the rebound is delayed.” ..

“Resume recovery”

Tom Liamas, Japanese economist at Capital Economics, also said that road bumps caused by the Omicron variant would only temporarily impede growth. “Omicron will only have a treading water in the Japanese economy this quarter following the recovery in the fourth quarter, but production should resume recovery soon and return to pre-virus trends by the end of the year.” He said in a memo.

“The number of daily cases has decreased and booster deployment has finally speeded up, so the clear breeze should come back in the second quarter,” he added. “Assuming no new concerns emerge, first-quarter production remains largely unchanged, second-quarter GDP is up 1.5% quarter-on-quarter, and third-quarter is up another 1.0% to the economy. Is expected to return to the pre-pandemic. Trends. “

In 2021, a 1.7% expansion reverses the trends seen in both 2020 and 2019, with a one-year household budget for consumer spending despite the summer virus surge and emergency restrictions. Expenditure was included. However, private non-residential investment has declined as chip shortages and supply chain issues have put pressure on factory output. Last year, Japanese Prime Minister Fumio Kishida announced a record $ 490 billion stimulus to support the country’s pandemic recovery. However, economists said the impact of spending is likely to be felt from the first quarter of 2022. — AFP

https://www.kuwaittimes.com/japans-gdp-rebounded-before-omicron-wave-hit/ Japan’s GDP rebounded before the Omicron wave hit

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