Japan's economy grows at just 1.1% last year

Tokyo: Japan's economy expanded at an anemic 0.2% annual pace in the last quarter, the government reported Monday, with growth for all of 2025 at just 1.1%. Private consumption rose at a 0.4% annualized pace in October-December, but that was offset by a 1.1% drop in exports, the latest seasonally adjusted preliminary data show.

Japan's export-reliant economy has been shaken by President Donald Trump's tariffs, but has been growing at a lackluster pace for years. Prime Minister Sanae Takaichi is expected to roll out policies to help revive the economy after a landslide victory in a general election earlier this month.

Takaichi has promised to spend more and to suspend Japan's sales tax on food, among other measures. Japan's GDP contracted 0.7% in July-September, quarter-to-quarter, after growing 0.5% in April-June. Since the economy returned to growth in the latest quarter, the country narrowly avoided a technical recession, which is two straight quarters of contraction.

On a quarterly basis, the economy grew 0.1% in October to December, the Cabinet Office reported. The 1.1% expansion last year was the fastest since 2022, when Japan was recovering from the disruptions caused by the COVID-19 pandemic.

The government is projecting that the economy will expand at an average rate of about 0.6% in the near term.