Japan's Growth Slows Down

Japan's economic growth hit a roadblock. The GDP growth for the third quarter of 2024 showed clear signs of a slowdown compared to earlier quarters.

Let’s break it down: Japan’s real GDP grew by 0.3% year-over-year, providing a glimmer of relief after two quarters of decline.

Yet, when you look at the quarter-on-quarter figures, the growth was just 0.2%, which is slower than the 0.5% bump seen in the second quarter, and it fell short of the predicted 0.3%.

Consumer spending did its part, but barely. It nudged upwards, with private consumption growth slightly underwhelming at 0.9%, down from the initial 1.0% estimation. This was, however, better than the dip experienced in the first quarter.

Now, onto the other key players: business investments ticked up by 0.8%, a bit less than initially thought, but still an improvement from previous declines.

Government spending remained unchanged at 0.1%, a slowdown from earlier in the year. Net trade was a drag on growth due to exports lagging behind imports.

Several factors hit the brakes on growth. Natural disruptions, like a typhoon and a megaquake warning, put a damper on consumer activity. On the brighter side, the auto industry saw some recovery spurred by wage increases and better corporate earnings.

In a nutshell, Japan's economy grew, but somewhat sluggishly due to internal and external challenges, including severe weather events that dampened consumer confidence and spending.