Low consumer spending intensified pressure on the Japanese economy in March

Posted on May 12, 2023   |  

In March, Japan's consumer spending fell quickly in a year, while real wages saw a 12th month of decline on continuous inflation.

Rising prices mediated by government energy subsidy programs put pressure on consumption by reducing the real purchasing power of households.

Household spending fell by 1.9% the biggest decline since March 2022, against economists' median projection for a 0.4% rise and following a 1.6% gain in February.

On a seasonally adjusted, monthly basis, spending fell by 0.8%, compared to an estimated 1.5% growth.

For FY 2022, household spending grew by 0.7%, stalling from a 1.6% growth in fiscal 2021.

Japanese real wages also fell by 2.9%, which is a full year of downhills from April 2022 on decades-high consumer inflation.