Japan’s household spending rose in October for the first time in over a year, in a sign the economy is gradually emerging from the damage caused by the first wave of coronavirus infections.
According to Reuters, separate data showed the world’s third-largest economy expanded more than initially estimated in July-September, thanks to a rebound in exports and consumption from the slump caused by lockdown measures to contain the virus.
But a recent resurgence of infections is clouding the outlook, keeping policymakers under pressure to support a fragile recovery with massive monetary and fiscal stimulus measures.
Prime Minister Yoshihide Suga on Tuesday announced a plan to compile a 73.6 trillion yen ($708 billion) stimulus package that will include 40 trillion yen worth of fresh spending.
“Japan’s economy will keep growing in the current quarter but may stagnate or contract in January-March,” if an increase in infections force the government to take stronger steps to contain the virus, said Takeshi Minami, chief economist at Norinchukin Research Institute.
Household spending rose 1.9 per cent in October from a year earlier, falling short of a median market forecast for a 2.5 per cent gain but the first rise in 13 months.