Data released on Tuesday revealed that retail sales in Japan grew for a ninth consecutive month in November, as a result of the government’s domestic travel subsidies and the easing of COVID-19 border controls.
However, November sales were down from the previous month as rising costs of goods hit Japanese families hard and the country’s core consumer inflation rate reached a new 40-year high, showing that price increases were becoming more widespread.
A recovery in private spending, which accounts for more than half of Japan’s economy, is key to reviving the economy, which unexpectedly contracted in the third quarter.
The median expectation was for a 3.7% increase in retail sales, so the actual 2.6% growth fell short. Sales growth, an indicator of consumer spending, dropped from 4.8% in September to 4.4% in October.
Seasonally adjusted retail sales fell 1.1% in November from the previous month, the first drop in five months.
Last week, data showed that in November, the first full month since Japan lifted the COVID-19 restrictions, the number of tourists soared to about 1 million.