Japan’s economy grew slightly during the fourth quarter of 2025. File Photo by Franck Robichon/EPA
Japan’s economy grew ever so slightly during the fourth quarter of 2025, government data showed Monday, narrowly avoiding a second straight quarter of contraction that would have met the common definition of a technical recession.
Preliminary estimates from Japan’s Cabinet Office show real gross domestic product rose 0.1% in the October-December quarter from the previous quarter, or 0.2% on an annualized basis.
Nominal GDP increased 0.6% quarter on quarter, or about 2.2% annualized, and the data show real GDP rose 1.1% in calendar-year 2025.
In real terms, domestic demand and net exports each contributed 0.0 percentage points to growth. Private consumption edged up 0.1% for an annualized 0.4%, while exports fell 0.3%, for a -1.1% annualized rate.
The report also showed an increase in economy-wide prices as measured by GDP deflators, which helps explain why nominal growth outpaced real growth.
“Domestic demand made a positive contribution overall, resulting in modest positive growth for the economy as a whole,” Chief Cabinet Secretary Minoru Kihara said Monday morning, The Japan Times reported.
“We expect that improvements in the income environment will support consumption going forward.”
The figures were released less than a month after the Bank of Japan on Jan. 23 released its economic outlook for 2026, stating it believes the economy is likely to continue moderate growth. On that assurance, it raised the economic growth forecast for the fiscal year from 0.7% to 0.9%.
