\n \n \n “. concat(self. i18n. t(‘search. voice. recognition_retry’), “\n
By Daniel Leussink
TOKYO (Reuters) – Japan’s economy grew more than expected in the current quarter as the lifting of local restrictions similar to COVID-19 boosted spending by customers and businesses.
That means Japan’s economy grew a third quarter between April and June, even as considerations about a variety of issues, such as the global slowdown and high energy costs, cloud the outlook.
The gross domestic product (GDP) of the world’s third-largest economy grew by an annualized 3. 5 percent in the current quarter, more powerful than the initial estimate of annualized expansion of 2. 2 percent, the government said Thursday.
The reading, which exceeds the average market forecast of a gain of 2. 9%, equates to a real expansion of 0. 9% quarter-on-quarter compared to the previous quarter.
“The economy has achieved maximum expansion compared to the U. S. “The U. S. and China are recording a recovery in the current quarter,” said Takeshi Minami, lead economist at the Norinchukin Research Institute.
“But it can be difficult for that momentum to continue . . . The global economy faces all sorts of uncertainties and emerging costs are leading to a suppression of domestic consumption. “
The growth suggests that domestic demand recovered after the government removed pandemic-related activity bottlenecks in the first quarter. This was partly due to a recovery in capital spending and a smaller decline in inventories such as automobiles, according to the data.
Private consumption, which accounts for more than a portion of the country’s GDP, rose 1. 2 percent according to the data, revised upwards from an initial estimate of a 1. 1 percent increase.
Capital expenditure rose 2. 0%, also revised upwards from an initial estimate of a 1. 4% increase and more than the average market forecast of a 1. 8% expansion, largely due to higher software investments.
Domestic demand as a whole contributed 0. 8 percentage points to revised GDP growth, while net exports added 0. 1 percentage points.
Japan has lost other primary economies to fend off the pandemic due to a slow recovery in consumption, due in part to aging consumers who are reluctant to spend on facilities such as restaurants and travel for fear of contracting COVID-19.
Japan’s extremely accommodative policy contrasts sharply with a global wave of interest rate hikes, which has led to a sharp fall in the yen, complicating policymakers’ prospects.
The fall of the Japanese currency, which has lost about 20% to the US. The U. S. economy over the past six months is driving up the price of imports and raising fears that families will be forced to pay more for goods.
(Reporting through Daniel Leussink; Editing via Sam Holmes)