# Japan: Sustained Positive Growth Momentum Ahead

- Link: https://www.thailand-business-news.com/japan/177140-japan-sustained-positive-growth-momentum-ahead
- Published: 2024-11-27T07:50:00+07:00
- Author: Fujiko Takahashi

**Japan’s real GDP rose by 0.2% q-o-q, driven by strong private consumption and 
exports. We maintain 2024 growth forecast at 0.6%, supported by steady demand for
automobiles and semiconductors. However, risks such as global economic uncertainty
and fluctuating energy prices could pose challenges. Policymakers are expected to
focus on measures to sustain economic momentum and address potential downside risks.**

**Key View **

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 * Preliminary data show that Japan’s real GDP increased by 0.2% q-o-q (annualised
   0.9%), slightly stronger than our estimate of 0.1% q-o-q. 
 * We maintain our 0.6% 2024 growth forecast, which implies a 0.5% q-o-q expansion
   in Q4 supported by steady private consumption recovery and exports.
 * We also maintain our 2025 annual forecast of 1.0% y-o-y as private consumption
   and export of automobile and semiconductor equipment to grow steadily.

**Preliminary data show that Japan’s real GDP increased by 0.2% q-o-q (annualised
0.9%), slightly stronger than our estimate of 0.1% q-o-q **(see chart below)**. **
The modest expansion was driven by a recovery in private consumption and exports.
Indeed, private consumption growth surprised to the upside with a 0.7% y-o-y (0.9%
q-o-q) rise in Q3, contributing 0.5 percentage points to headline growth. That marked
a rebound from a 0.7% y-o-y fall in Q2 and outperformed our 0.4% forecast. Notably,
non-durable goods grew strongly by 1.7% y-o-y, compared with 0.4% y-o-y in Q2. One
reason is that summer bonuses on average matched the record high of 4.2% y-o-y growth
for large companies. Another factor was the JPY40,000 in tax credits per household
in June. Durable goods consumption also grew by 7.6% y-o-y in Q3, partly due to 
pent-up demand – a safety testing scandal had forced autos production to stop in
Q1 and Q2. Meanwhile, exports grew by 0.1% q-o-q (1.5% y-o-y) as automobile and 
semiconductor equipment shipments remained robust thanks to resilience in the global
economy. 

Japan has shown remarkable resilience in the face of global economic challenges,
with positive growth momentum expected to persist in the coming years. Despite the
aftermath of the COVID-19 pandemic and ongoing supply chain disruptions, the nation’s
economy has displayed a robust recovery driven by increased consumer demand and 
a rebound in exports. Government stimulus measures and supportive monetary policies
have further bolstered economic activities, setting a strong foundation for sustained
growth.

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Moreover, Japan’s commitment to innovation and technological advancement plays a
crucial role in its economic trajectory. The nation is a global leader in robotics,
artificial intelligence, and sustainable energy solutions. Investments in these 
sectors not only enhance productivity but also create new jobs and opportunities
for the workforce. As Japan continues to push for digital transformation, businesses
are expected to adopt modern technologies that will further stimulate economic expansion.

Looking ahead, Japan’s aging population poses challenges; however, it also presents
opportunities for growth and evolution in various sectors. Initiatives to enhance
workforce participation, particularly among women and older individuals, will counterbalance
demographic concerns. By fostering a culture of inclusivity and innovation, Japan
is well-positioned to maintain its growth momentum and remain a key player in the
global economy.
[Read More](https://www.fitchsolutions.com/bmi/country-risk/japan-positive-growth-momentum-persist-15-11-2024)