Tokyo: Japan's household spending in fiscal 2024 experienced a decline for the second year in a row, decreasing by a real 0.1 percent compared to the previous year, as consumers cut back on food expenditure due to rising prices, as revealed by recent government data.
According to Emirates News Agency, households consisting of two or more individuals spent an average of 304,178 yen ($2,100) per month in the fiscal year that concluded in March. This spending figure serves as a crucial indicator of private consumption, which constitutes more than half of Japan's gross domestic product.
The decline in household spending coincided with a fall in real wages in March, which dropped by 2.1 percent from a year earlier. This marked the third consecutive month of declining wages, as income growth lagged behind price increases. The depreciation of the yen has contributed to higher import costs, and companies have responded by passing on labor and other expenses to consumers.