Japan’s economy expanded for a third consecutive quarter, boosted by household consumption and investment, although the pace came in below estimates.
In particular, as announced by Japan’s statistics agency, the GDP of the world’s third largest economy expanded by 2.2% year-on-year in the second quarter.
A pace significantly faster than the +0.1% in January-March, but considerably slower than the 2.5% markets expected.
The growth was mainly attributed to a rise in private consumption (+1.1%), which accounts for more than half of Japan’s GDP, the data showed, although it came in below the 1.3% estimate.
Capital spending, however, increased by 1.4%, outperforming the market forecast of +0.9%.
External demand was unchanged, although analysts had expected it to contribute 0.1% to GDP growth.
Japan’s post-pandemic recovery has lagged behind that of other major economies, however, due to lackluster consumption partly attributed to containment measures until March.
This has made the Bank of Japan an exception to the global economic backdrop, where most central banks are aggressively tightening monetary policy due to galloping inflation.
Analysts hope that demand will support consumption until wages rise enough to balance the rise in the cost of living. But there are doubts about whether and to what extent Japanese companies can deliver increases as global demand slows.
Source: Capital
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