Photo/Illutration A man eats under menu pictures with prices at a restaurant in a market, in Tokyo, Japan March 3. (REUTERS)

Japan’s economy grew at an annual pace of 0.1% in October-December, in a downgrade from an earlier 0.6% increase, showing how the world’s third-largest economy was barely eking out growth.

The Cabinet Office’s revised figure for seasonally adjusted gross domestic product, or GDP, for the last three months of 2022 showed growth on quarter was flat, down from an earlier estimate given in February at 0.2% growth.

The annual rate shows what the growth would have been if the on-quarter rate continues for a year.

Domestic demand shrank 0.3%, worse than the earlier release, showing a 0.2% decline, according to the data released Thursday. Public demand stood unchanged from the initial figure at plus 0.3%.

The latest numbers underline Japan’s fragile recovery, although the easing of restrictions related to the coronavirus pandemic has helped.

Japan has struggled over a shortage of imported parts from China, and the rest of Asia, such as computer chips for the auto industry, as well as inflation, especially the higher prices of energy, worsened by Russia’s war in Ukraine.

The return of economic activity, especially tourism, is expected to bolster the rebound.

Restaurants and other businesses are welcoming the return of crowds, as vaccination is generally widespread in Japan. Although COVID cases still persist, including deaths, the nation has been gradually relaxing measures, such as crowd size restrictions or mask-wearing requirements.

Japan’s economy shrank 0.3% in the July-September period from the previous quarter. GDP is the total value of goods and services produced in a country.

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