- Japan’s economy grew 0.1%, both on a quarter-on-quarter and a year-on-year basis.
- This brought the economy back to growth, but missed expectations.
- The expansion also helped Japan avoid a technical recession.
Japan’s economy grew 0.1% in the fourth quarter of 2025 compared with the previous three months, narrowly avoiding a technical recession.
While it was a reversal of the 0.7% contraction in the third quarter, the gross domestic product missed expectations of a 0.4% expansion by economists polled by Reuters.
A technical recession is commonly defined as two consecutive quarters of contraction.
On an annualized basis, output rose 0.2%, compared with forecasts of 1.6%, following a 2.3% decline in the previous quarter.
Compared with a year earlier, fourth-quarter GDP expanded 0.1%, slowing from 0.6% in the third quarter. Private consumption drove the modest expansion, offsetting weakness in exports and public spending, according to data from Japan’s Cabinet Office.