By Gary Hirst
Despite sluggish economic growth throughout 2014, the Japanese economy did make several strides to recovery. In the fourth quarter of last year, the Japanese economy fought off recession to make a significant recovery, led especially by gains in the insurance sector.
The Japanese economy grew at an annual rate of 2.2 percent throughout the last quarter. The positive growth helped bring the nation out of a recession, but concerns about the economy growth still linger among observers.
The growth was actually weaker than what forecasts had anticipated. Reuters forecasts, in particular, called for a 3.7 percent increase for 2014′s last quarter. The weaker than expected figure now suggests that Japan‘s economic recovery may be a lot more fragile than many thought.
The initial reading for the nation’s GDP depicted a quarter-to-quarter increase amounting to 0.6 percent. That increase came after two consecutive quarters of recession, mainly due to the lasting effects of April’s sales tax increase.
Despite those concerns, economic growth did occur. The Bank of Japan, as a response to the growth, is expected to forgo expanding their current economic stimulus plan for the foreseeable future. Analysts are a bit concerned about the move, since oil prices are still in a slump and have pushed the central bank further away from achieving their inflation target.
Speaking of inflation, recent data revealed that the nation’s core inflation rate slowed for a six consecutive month during January. Japan’s main consumer price index increased 0.3 percent year-to-year throughout January. Despite the increase, the figure was widely said to ‘not even reach a quarter of the Bank of Japan’s inflation target.’
Many analysts forecast the nation’s consumer price index to settle at an annual rate of 2.3 percent throughout January, down from December’s 2.5 percent increase.
Exports rallied throughout the fourth quarter despite a weaker yen. Demand helped add on about 0.2 percent in growth.