Japan’s economy likely rebounded in April-June after last quarter’s contraction thanks to strong in-person customer spending that is no longer hampered by coronavirus restrictions, according to a Reuters poll on Friday.
However, for the current quarter, analysts are concerned about emerging risks, adding the global economic slowdown and the resurgence of Covid-19 cases in Japan.
The world’s third-largest economy likely grew at an annualized rate of 2. 5 percent between April and June, recovering from a 0. 5 percent contraction in the first quarter, according to the median forecast of 17 economists.
The second-quarter expansion was largely due to an expected 1. 3% increase in personal consumption, which accounts for more than a portion of Japan’s gross domestic product (GDP), according to the survey.
Capital spending likely increased by 0. 9 percent, according to the survey, which also suggests that the external call brought a 0. 1 percent increase to GDP growth.
A recovery in consumption since COVID-19 restrictions were lifted in March drove the expansion from April to June, said Saisuke Sakai, senior economist at Mizuho Research and Technologies, who also highlighted last year’s transferred business investment.
All of this offset the negative on Japanese production from the blockades in China, Sakai said.
But “Japan’s speed of recovery will be slower in July-September, as families are likely to be wary of the outbreak (renewed coronavirus), along with other problematic threat factors, such as emerging costs and the slowdown in the global economy,” he added.
Separate knowledge will likely show that Japan’s existing account balance in June marked its first deficit since January, due to rising imports.
Wholesale prices were estimated to be 8. 4% higher in July than the previous year, and the speed of increases slowed for a third month, the vote showed. Wholesale price inflation hit a record high of 9. 9% in April.
The government will begin gdp awareness from April to June at 8:50 a. m. m. of August 15 (23:50 GMT of August 14) and knowledge of the existing account at 8:50 a. m. m. of August 8 (23:50 GMT of August 7).
The Bank of Japan will sell wholesale value data at 8:50 a. m. m. of August 10 (23:50 GMT, August 9).
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