Tokyo: Japan's gross domestic product (GDP) grew by 0.1 percent in the final quarter of the year, breaking a streak of two consecutive quarters of contraction, as reported by government data on Monday.
According to Kuwait News Agency, the preliminary data released by the Cabinet Office indicated that Japan's economy rebounded at an annualized pace of 0.2 percent from October to December 2025. This growth was primarily driven by an increase in personal spending. Economy and Fiscal Policy Minister Minoru Kiuchi commented on the figures, highlighting a gradual economic recovery. He noted improvements in employment and income, as well as the anticipated positive impact of various government policies, as significant contributors to the recovery. However, Kiuchi also cautioned about potential risks, particularly concerning future price trends and developments in US trade policy.
Personal consumption, which constitutes over half of Japan's GDP, increased by 0.1 percent from the previous quarter. This was attributed to strong demand for smartphones and accommodation services, although there was a decline in spending on automobiles and food. Corporate capital spending, another critical component of domestic demand, rose by 0.2 percent. This increase was spurred by investments in artificial intelligence (AI), which led to higher spending on semiconductor manufacturing equipment and related items.
In terms of foreign demand, exports fell by 0.3 percent, with automobile exports continuing to face challenges. For the entirety of 2025, Japan's GDP grew by 1.1 percent, marking the first annual expansion in two years. GDP represents the total value of goods and services produced within a country.