Retail sales in Japan increased for the ninth straight month in November, on the back of the lifting of Covid-19 border controls, coinciding with the government’s domestic travel subsidy which boosted consumer spending power.
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November retail sales grew 2.6 percent from the year earlier but fell short of a median forecast of 3.7 percent. The pace of annual growth in sales, a barometer of private consumption, slowed from 4.4 percent in October and 4.8 percent in September, according to data released on December 27.
On a seasonally adjusted basis, retail sales slipped 1.1 percent in November from the previous month, down for the first time in five months.
The retail sales uptick comes after data showed last week that visitor arrivals to Japan surged to nearly 1 million in November, the first full month after the country got rid of Covid-19 restrictions that led to halted tourism for more than two years.
Starting mid-October, a government domestic travel subsidy campaign to help the pandemic-hurt tourism industry, also encouraged locals to spend on travel and associated goods.
In the recently ending third quarter, Japan’s economy unexpectedly shrank, as global recession risk, China’s fragile economy, a weak yen and higher import costs hit consumption and businesses, according to Reuters.
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Last week, the Japanese government revised up its growth forecast for the next fiscal year to 1.5 percent, from a 1.1 percent expansion in the previous forecast from July.