Japan’s economy grew by 0.4 percent in the first quarter from the previous three months, a faster-than-expected pace. Stronger consumer demand, along with the country’s recovery from the recession triggered by the effects of the covid-19 pandemic, was behind the more favourable result, the Japanese government said in a preliminary report today.
Improvement in Japan’s economy
Analysts had expected the economy to show 0.1 percent growth in the first quarter, according to Reuters. In the fourth quarter of last year, growth was zero. On an annualized basis, the economy then posted growth of 1.6 percent, compared with a contraction of 0.1 percent a quarter earlier. This is also an improved result, as analysts had expected full-year growth of 0.7 per cent for the first quarter.
The ability to cope with the problems of the global economy gives analysts hope that the economic recovery in Japan will hold for now. But signs of slowing economic activity in the United States, Europe and China are clouding the outlook. This adds to the uncertainty around how quickly the Bank of Japan will be able to unwind its massive support programme.
Growth will continue
“Growth will continue to be supported by consumption. The removal of anti-poverty measures is helping spending in the tourism and services sectors,” said Yoshiki Shinke, chief economist at the research institute at insurance firm Dai-ichi Life. “But the economic recovery will be only gradual as weak foreign demand will adversely affect exports. It will be a tug-of-war between very strong domestic demand and weaker exports,” he said.
Japan has the world’s third-largest economy after China and the United States. The development at the end of last year was weaker than initially expected. In fact, preliminary data for the fourth quarter suggested the economy had posted a 0.1 percent rise on an annualized basis, but a revision showed it actually fell 0.1 percent.
Source: CTK
