The coronavirus pandemic suddenly took over the world in 2020 and created havoc on the economies of almost every nation across the globe. However, after two years, countries are returning to normalcy, and some are doing better than others when it comes to economic growth.
The recent relaxation of the COVID-19 restrictions in Japan has further triggered a revival in consumer spending in the nation that has helped in helping the economy to rebound at the beginning of this year. The GDP of Japan rose to 5.4% from October to December 2021. The economy of Japan last year recorded a 1.3% rebound from the fall of 0.7% during the months of July to September
Kavan Choksi– consumer spending has increased
Business and finance expert Kavan Choksi states consumer spending in Japan constitutes about 50% of the nation’s GDP, and it has risen by 2.7% compared to the quarter last year. This led to the shutdown of major revenue-generating industries like entertainment, tourism, and restaurants. After the lifting of these COVID-19 restrictions, these sectors witnessed a revival as more and more consumers returned to them to purchase goods and services.
Employees started to return to office after the coronavirus restrictions were lifted in the nation.
After the Japanese Government lifted the state of emergency for the coronavirus pandemic in 2021, employees returned to their offices, which later boosted several related sectors in the economy as well. The total consumer spending also experienced a good rebound and returned to higher levels than they were in 2019.
In the past, there were supply constraints for production materials, for instance, semiconductors. After the coronavirus restrictions were lifted, these restrictions were also eased, and this generated growth in the nation’s automobile and electronic industries. The production levels in these sectors were boosted so that they could ideally make up for the loss that had taken place last year. These efforts resulted in an increase of 9.7% in consumer spending durables, and experts recorded a rise of 1% in the industry.
Supply chain in the nation
Though there has been a massive recovery in both the production and the consumption of services in Japan, the rebound for CAPEX seems to be weaker because of supply chain disruptions in the country. The economic growth in Japan is more vulnerable if you compare it to the USA, where the nation had accelerated an annual increase of 6.9% during the last quarter of 2021.
During 2021, the entire economy of Japan witnessed a growth of approximately 1.7%, which turned out to be positive for the country since the outbreak of the coronavirus for the first time in almost three years. Business and finance expert Kavan Choksi states that when it comes to the impact of the Omicron variant of the coronavirus, Japan had to impose some more restrictions at the beginning of 2022. There was a drop in production levels, and consumer spending again contracted during the first quarter of this year.
However, when it comes to Japan has permanently been endowed with the spirit of facing challenges and fighting back with success. The Second World War is an example when it comes to the nation’s ability to face adversity and bounce back over time.