Japan's Economy Watchers Survey, which polls the nation’s cab drivers, bartenders, hotel staff, and other frontline service workers, saw a modest increase in December, rising to 49.9, up from 49.4 in November. This figure, however, remains just below the critical 50 mark that distinguishes optimism from pessimism, as reported by the Cabinet Office.
The results of this survey suggest a continued moderate recovery path for the economy, with expectations for gradual improvement moving forward. Despite prevailing concerns regarding the effects of escalating prices and other economic factors, the outlook indicates cautious optimism. According to the Cabinet Office, "looking ahead, the economy is expected to continue its gradual recovery." Forecasts from the Bank of Japan hint that the Economy Watchers Survey may display additional improvements in 2025.
As for the economic projections, Japan’s gross domestic product (GDP) is anticipated to grow by a modest 0.6% year-on-year for the fiscal year ending April 1, 2024. The subsequent fiscal year is expected to see a more substantial growth of 1.1%, as estimated by the Bank of Japan in a report released in early November. In contrast, a separate survey revealed that corporate bankruptcies in Japan surged to 9,901 cases in 2024.
This marks a notable increase of 16.5% compared to the previous year, representing the highest level recorded since 2014, as reported by the Tokyo-based think tank Teikoku Databank. Contributing factors to this alarming trend include significant labor shortages and rising input prices that have compelled businesses to close their doors. The insights gathered from these reports paint a nuanced picture of the Japanese economy, where cautious signs of recovery exist alongside troubling trends in corporate viability..