Japan’s household spending crashes on restricted recovery

December had seen Japan’s household spending drop for the first time in three months. This heavily indicates that the country’s consumer sentiment was dwindling even before the government implemented virus-related restrictions.

Household spending recorded a 0.6% drop in December, official data showed on Friday. While the record came slower than the 2.4% median forecast, it still stood as the first year-on-year drop the country had seen in three months.

In 2020, spending of households composed of at least two people dropped 5.3% as the coronavirus drag heavily pressed. For all households, it crashed 6.5% to hit its sharpest decline since the government started data monitoring in 2001.

The world’s third-largest economy defied its worst postwar slump last year. However, its third wave of coronavirus infections brought in fears that the country will still have to suffer from subdued economic growth.