Japan’s Tourism Recovery Following COVID-19 Elimination

In the first quarter of 2023, Japan’s gross domestic product (GDP) rose 0.4% on a quarterly basis, according to official data published on Wednesday, in growth that exceeded expectations and was partly contributed to by the tourism sector’s recovery after COVID-19-related restrictions were lifted.

After Japanese gross domestic product (GDP) growth in the last three months of last year was zero, experts expected the economy in the first quarter to grow by only 0.1%, but the result was more than 3 times that figure.

On Wednesday, government data showed that the world’s third largest economy grew 1.6% year-on-year from January to March, far exceeding expectations for 0.7% growth. Recorded first growth in three quarters on a quarterly basis.

Private domestic consumption, which accounts for more than half of the economy, grew by 0.6% in January-March compared with the previous quarter, as the country’s reopening from the pandemic boosted spending on services. This exceeds expectations of an increase of 0.4%.

Capital expenditure data were also positive, rising surprisingly by 0.9%, and forecasts were for a 0.4% decline.