Tokyo: Japan has emerged from economic contraction as the country reported a 0.2% growth in the fourth quarter of last year. The government figures revealed a rebound from a steep 2.6% contraction in the previous quarter. Although the growth fell short of analysts' expectations of 1.6%, it indicates a clearer path to recovery.

According to Thai News Agency, the modest growth can be attributed to easing pressures from US tax measures, which may lead the Bank of Japan to continue normalizing its monetary policy. The increase in private sector investment was recorded at 0.2%, while household consumption rose by 0.1% amid high living costs and food prices, prompting cautious spending by consumers. The export sector showed signs of stabilization following a reduction in trade friction.

Economists project gradual economic expansion for Japan this year, anticipating an annual growth rate of 1.04% in the first quarter and 1.12% in the second quarter. In response, Prime Minister Sanae Takaichi's government is formulating a stimulus package worth over 21.3 trillion yen to enhance confidence and ensure sustained long-term recovery.