by Tetsushi Kajimoto and Leika Kihara

TOKYO (Reuters) – Japan’s economy slipped back into expansionary territory in the October-December period after contracting in the previous quarter, government data showed on Tuesday, signaling the country is finally recovering from the aftermath of the health crisis of the coronavirus.

But the growth recorded in the last quarter of 2022 is below expectations, suggesting that the global economic slowdown is weighing on the Japanese economy, which is highly dependent on exports.

Japan’s gross domestic product (GDP) rose in the October-December period by 0.6% at an annualized rate, after contracting 1.0% in the final reading in the previous quarter. Analysts polled by Reuters on average expected growth of 2.0%.

According to official data, private consumption – which accounts for more than half of Japan’s GDP – rose 0.5% in the fourth quarter, an increase in line with consensus.

External demand added 0.3 percentage points to growth, while analysts expected a contribution of 0.4 points.

With the lifting of some of the toughest COVID-19 pandemic border measures in the world in October, Japan has seen an increasing number of foreign visitors, which has helped its economy rebound.

Policymakers in Tokyo hope that a rebound in domestic consumption, driven by the use of savings accumulated during the health crisis, will last long enough to allow wages to rise and thus offset rising food and energy prices. .

With inflation settling above the Bank of Japan’s (BoJ) 2% target, the economic outlook and wage developments are key elements for the monetary policy calendar of the central bank, which rolled out major stimulus measures.

(Report Tetsushi Kajimoto and Leika Kihara; Jean Terzian)

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