Japan's Economic Struggles: Growth Stalled Amid Exports Decline

Japan's economy showed minimal growth of 0.2% annually in the last quarter, with overall 2025 growth at 1.1%. Despite a rise in private consumption, a decline in exports impacted performance. Prime Minister Sanae Takaichi plans new policies, including suspending sales tax on food, to energize economic growth.

Japan's economic growth remained sluggish at an annual pace of just 0.2% during the last quarter, as revealed by government data on Monday. The nation's overall growth for 2025 stood at a modest 1.1%.

While private consumption increased at a 0.4% annualized rate from October to December, it was countered by a significant 1.1% drop in exports, according to the latest seasonally adjusted preliminary data. The export dependency of Japan's economy faced challenges, exacerbated by tariffs imposed by President Donald Trump.

Following a landslide electoral victory, Prime Minister Sanae Takaichi plans to implement policies aimed at boosting economic performance. These include increased spending and temporarily suspending the sales tax on food. The minor quarterly growth has helped Japan narrowly avoid a technical recession after a previous contraction.